State-owned construction company Pembangunan Perumahan is seeking to acquire heavy equipment leasing company Prima Jasa AldoDua to support its construction business, an executive said on Thursday.
The acquisition is expected to be completed by February 2014, according to PP finance director Tumiyana.
The funds needed to finance the acquisition will come from internal cash, Tumiyana added.
Prima Jasa, based in Bekasi, on the outskirts of Jakarta, leases heavy equipment to the construction sector.
Tumiyana said that Prima Jasa’s total assets were valued at Rp 200 billion ($17.3 million). He declined to disclose the value of the acquisition.
“For the time being, we will use Prima Jasa to meet the needs of heavy equipment for PP,” he said. “However, we are not ruling out the possibility that the company will enter the heavy equipment rental business in the future.”
In addition to heavy equipment, PP also plans to strengthen its property business.
Its real estate subsidiary, PP Properti, signed a memorandum of understanding in Jakarta on Oct. 31 with Perkebunan Nusantara (PTPN) IX, a state-owned agriculture company, to develop an integrated mixed-use property.
PP Properti will utilize idle land owned by PTPN IX in Colomadu and Ronggowarsito, near Solo in Central Java, covering an area of 18 hectares and 0.9 hectares respectively. Work on the mixed-use property project is expected to begin next year.
PP’s profit surged 106.7 percent to Rp 218.3 billion in the first nine months this year from the same period last year.
Revenue increased 84 percent to Rp 7.25 trillion over the same period.
As of October 2013, PP’s recorded contracts were valued at Rp 13.93 trillion, or 70 percent of its 2013 target of Rp 20 trillion.
PP expects to undertake construction projects valued at Rp 25 trillion next year.
The new contracts are expected to lift revenue by 20 percent next year.
Shares of PP rose 8 percent to Rp 1,220 on the Indonesia Stock Exchange (IDX) on Thursday, outpacing the 1.5 percent gain in the main stock gauge.
State-owned contractors like PP, Adhi Karya and Wijaya Karya are expected to benefit from the government’s plan to boost infrastructure projects nationwide.