Public Offering

 In year 2002 the number of offerings were 20 initial public offerrings,12 public offerings with pre-emptive right, and 12 bond offering. These numbers show a decrease compared to those in 2001, which were 31 share initial public offering, 13 share public offering with pre-emptive right, and six bond offerings

The declining number of offerings in 2002 was influenced mainly by the slowdown of domestic as well as international economy. Several occasion abroad, such as WTC attack and some corporate scandals, and several occasion in Indonesia, such as foreigners sweeping and Bali bombing, have hurted the stability of the Indonesian Capital Market.

Apart from the declining number of public offering, there was a worth noting phenomena that highlighted Indonesian capital market in 2002. It was an upward trend of small and medium entreprises participation in the Indonesian Capital Market. In year 1999, there was only one small and medium entreprise conducted IPO, in year 2000 there were six companies and in 2001 this number increased significantly to 16 companies. This number declined to be eight companies in year 2002. Although there was a decrease, yet, it was still higher than of 2000. In other words, the growth of small and medium enterprise withdrawing funds from capital market showed an upward trend in the last three years.

Considering that small and medium entreprises usually have a strong capital structure with debt that were not denominated in foreign currencies, thus the upward trend of their participation in the Indonesian Capital Market would boost the development of the Indonesian Capital Market .

Debt Restructuring

A prolonged economics crisis since year of 1997, has brought some issuers/public companies into financial troubles. This condition forced a number of issuers/ public companies to restructure their debts. In year 2002, some companies has completed restructured their debt which was exceeded USD 1 billion, among them were PT Bakrie & Brothers Tbk, PT Gajah Tunggal Tbk, PT Indocement Tunggal Prakarsa Tbk, PT Semen Cibinong Tbk and PT Telekomunikasi Indonesia Tbk.

There are some capital market instruments that are available for Issuers/Public Companies to facilitates their debt restructuring. Based on data, 10 issuers conducted public offering with pre-emptive right, two Issuers conducted in order to restructure their debt. Besides that, there were five Issuers conducted Capital increases Without Pre-emptive Right.

Some Issuers/Public Companies have to restructure their debt through Indonesian Bank Restructuring Agency (IBRA), since their creditors have been put in to IBRA program, thus IBRA become their creditor. To facilitates debt restructuring with IBRA, Bapepam and IBRA in July, 2002 have established a work team for inventarising and completing IBRA problem related to capital market.

Besides with IBRA, some Issuers / Public Companies restructure their debt through Jakarta Initiative Task Force (JITF). Since it was founded, JITF has facilitated 52

Issuers/Public Companies in restructuring their debt. Of those number, 42 have completed the restructuritation and other 10 are in the final stage.

For Bond Market, one important point to be noted in year 2002 was there were some Bond Issuers who were default in paying bond interest and bond principal.

Based on data,12 issuers were default ini paying their bond interest. From this nimber, 11 issuers were default in paying the principal. This default were mainly caused by liquidity problems faced by the issuers as a result of the economic crisis. As per December 30, 2002, all of these issuers are in the process of restructuring their obligation.

Tender Offer

Tender offer is an opposite action to share public offering. In public offering, the offering is an offering to sell, meaning that investor decision is whether to buy or not to buy share. On tender offer, on the other hand, the offering is an offering to buy, meaning that the share holder decision is whether or not to sell. In 2002,some Issuers/Public Companies whose shares purchased through tender offer were PT Darya Varia Tbk, PT Bank Danpac Tbk and PT Alfa RetailindoTbk.

Acquisition

Acquisition of Issuers/Public Company can be done either through tender offer process or debt to equity swap . Issuers acquired through tender offer were PT Medco Energy International Tbk. and PT Sumalindon Lestari Jaya Tbk. Some Issuers / Public Companies acquired through debt to equity among other were PT Adindo Forestra Indonesia Tbk. which was acquired by Traffon Investment Private Ltd. and Bazehill International Ltd, PT Citatah Tbk., PT Sekar Laut Tbk and PT Japfa Comfeed which acquired by their creditors syndicate.

Besides being acquired, some Issuers/Public Companies can also acquire other companies.  Issuers/Public Companies acquired other companies in year 2002, among other were PT Tirta Mahakam Plywood Industry Tbk. and PT Sigmantara Alfindo Tbk. PT Tirta Mahakam Plywood Industry Tbk. acquired PT Windu Nabatindo Lestari, and PT Sigmantara Alfindo Tbk. acquired PT Alfa Retailindo Tbk. Both acquisition are acquisition of unafiliated companies

Merger

Merger is an amalgation of two or more companies where one company survive and others are liquidated. In 2002, Issuers/Public Companies conducted merger were PT Indomobil Sukses International Tbk., PT Sarasa Nugraha Tbk., PT Pfizer Indonesia Tbk, PT Bank Danpac Tbk., and PT Bank Bali Tbk.

PT Indomobil Sukses International Tbk. merged with its subsidiaries, PT Sumber Artha Perdana and PT Indosentral Binatrada. PT Sarasa Bugraha also merged with its subsidiary, PT Sarasa Mitratama. Meanwhile, merger between  PT Pfizer Indonesia Tbk. with PT Warner Lambert was conducted as part of big merger scheme initiated by their parent companies.

In the banking insdustry, there were some mergers conducted during year 2002, PT Bank Danpac Tbk and PT Bank Pikko Tbk, two public banks owned by Chinkara Caital Limited, were merged and PT Bank Danpac Tbk became the surviving company. There were also other merger conducted by PT Bank Bali Tbk, PT Bank Universal Tbk, PT Bank Arthamedia, PT Bank Patriot and PT Bank Prima Express. This merger was conducted as part of IBRA program, and as as result of this merger, there are one new company named PT Bak Permata Tbk.

Buy Back

In year 2002, Issuers/Public Companies carried out share buy back are PT Dynaplast Tbk., PT HM Sampoerna Tbk., PT  Indofood Sukses Makmur Tbk., PT Metrodata Elektronik Tbk., PT Matahari Putra Prima Tbk. and PT Panin Insurance Tbk. The main reason for this corporate action was to increase the price of their market share

Go Private

Going private is an action to alter the status of a company, from public company to private company.

In 2002, Issuers/Public Companies conducted going private were PT Miwon Indonesia Tbk., PT Pfizer Indonesia Tbk. and PT Indocopper Investama Tbk.

For Bapepam, the most important issue to consider in going private is the protection for public investor. Therefore, Bapepam requires the party who wish to conduct going private to do tender offer. Tender offer will assure the protection for the public investor in term of pricing, and equal chance to sell their shares

Stock Plit/Reverse Stock

During 2002, Issuers/Public Companies conducted stock split were PT Bank Buana Indonesia Tbk, PT Mustika Ratu Tbk., PT Jaka Artha Graha Tbk., PT Jakarta International Hotel & Development Tbk, and PT Summarecon Agung Tbk. Meanwhile, two Issuers conducted reverse stock was PT Pembangunan Graha Lestari Indah Tbk.and PT Bank Lippo Tbk

Material Transaction/Conflict of Interest

During year 2002, Issuers/Public Companies conducted material transaction among other were PT Bimantara Citra Tbk, PT Jakarta Setabudi Internasional Tbk, PT Berlian Laju Tanker Tbk, PT Panasia Filament Inti Tbk., PT Panasia Indosyntec Tbk., PT Indonesia Prima Property Tbk., PT Indomobil Sukses International Tbk., PT Indosat Tbk., PT Procter & Gamble Tbk, PT Tirta Mahakam Industri and PT Smart Corporation Tbk. Of those transaction, transaction conducted by PT Bimantara Citra Tbk,PT Jakarta Setabudi Internasional Tbk, PT Berlian Laju Tanker Tbk, PT Panasia Filament Inti Tbk., PT Panasia Indosyntec Tbk., PT Indomobil Sukses International Tbk., PT Indosat  Tbk, PT Procter & Gamble Tbk. and PT Smart Corporation Tbk. consisted of conflict of interest.
 

Changes In Main Business Activity/Discontinue of Business Line of Issuers Or Public Companies

Issuers changes their Main Business/discontinued their business line area PT Asiana International Tbk, PT Astra International Tbk, and PT Infoasia Teknologi Tbk. PT Asiana International Tbk changed its main business activity, from toys production company to commodity trading and distribution company. PT Astra International Tbk sold its ownership in PT Sumalindo Lestari Jaya Tbk, and PT Infoasia Global Tbk sold its web departement.

Privatization of State Owned Enterprises

Privatization of PT Bukit Asam Tbk. has contributed to a wave of privatization of State Owned Enterprises through capital market. The active participation of State Owned Enterprises in the capital market is an advantageous for the development of the capital market, for the State Owned Enterprises themselves, and for Indonesian economy in general.

For the capital market, State Owned Enterprises play a big role in lifting up composite price index, increasing market capitalization value and the number of floating shares. For the State Owned Enterprises, capital market through good corporate governance principles contained in Bapepam Rules will enhance its efficiency and this will eventually lead to an expansion of Indonesian Economy.

Table of Contents Bapepam Annual Report 2002

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