(Reuters) – Indonesian palm oil firm PT Sinar Mas Agro Resources and Technology Tbk is considering a rights issue or an initial public offering next year to comply with a new stock exchange regulation, a company executive said on Tuesday.
The Indonesian stock exchange in January required companies to make shares amounting to at least 7.5 percent of their paid-up capital available to the public in a bid to increase market liquidity and trading volumes.
Sinar Mas Agro will comply with the regulation, Director Jimmy Pramono told reporters.
The company currently has a market value of 18.7 trillion rupiah ($1.6 billion). PT Purimas Sasmita, a unit of Singapore-listed Golden Agri-Resources Ltd, owns 97.2 percent and the remaining 2.8 percent is in public hands.
Sinar Mas Agro aims to raise its crude palm oil (CPO) production by 5 percent this year from 730,240 tonnes in 2013, Vice President Director Budi Wijana said. It is comfortable with the current CPO price range of $700-800 per tonne, Wijana added.
Sinar Mas Agro also plans to increase its refining capacity by nearly 40 percent to 10,600 tonnes per day over the next three years.