Phillip Capital takes stake in Indonesian equipment finance business
Singapore-based Phillip Capital Group has acquired a 9.71% stake in Intan Baruprana Finance (IBF), the financing arm of Indonesian heavy equipment distributor Intraco Penta, through a rights issue. Transaction value was not disclosed.
Fred L. Manibog, president director of IBF, said that the new capital would be used to expand and diversify the company's financing operations into oil and gas, agribusiness, infrastructure and logistics.
Founded in 1991 as a multi-finance arm of Bank Mashill Group, IBF started out in consumer finance. The strategy switched when the company was acquired by Inta Finance, a subsidiary of Intraco Penta, in the early 2000s and IBF now focuses on leasing services, primarily for the general mining industry.
According to Bradley Chew, investment director at Phillip Capital, the deal came after more than two years of negotiations, The Jakarta Post reported. Intraco Penta will continue to hold a majority stake of 79.72% in IBF, with Intra Trading, another affiliate of the parent, taking 10.57%. Phillip Capital controls the remainder through its Phillip Asia Opportunity Fund.
Jakarta-listed Intraco Penta works with manufacturers including Volvo, Ingersoll-Rand and Bobcat, providing equipment and related services such as assembly and repairs to a variety of industries. It has more than 30 branches throughout Indonesia. Other subsidiaries include equipment rental business Terra Factor Indonesia and equipment manufacturer Colombia Chrome Indonesia.
Net profit for the six months ended June came to IDR22.8 billion ($2.1 million), down from IDR33.3 billion in the first half of 2012. Operating revenue for the period dropped 12.7% to IDR1.4 trillion. The bulk of this - IDR1.2 trillion - came from equipment sales, with financing contributing IDR74.8 billion.
Phillip Capital has approximately $22 billion in assets under management across several strategies. In May, it exited Inviragen, a biotech start-up that is trialing a dengue fever vaccine, to Japan's Takeda Pharmaceutical. The sale price could reach $250 million conditional on certain development targets being reached, delivering a 7.5x return to Phillip Capital.
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