Honda motorcycle main dealer plans to go public next week

The Jakarta Post, Jakarta

One of Honda's main dealers and distributors for motorcycles and spare parts, Wahanaartha Harsaka, plans to go public on Jan. 23-25, offering a total of 590 million shares priced at Rp 235 to Rp 285 each.

The shares, which amount to about 29 percent of the company's ownership, will be listed on the Jakarta Stock Exchange on Jan. 31, with PT Investindo Nusantara acting as the underwriter.

President director Robbyanto Budiman said in a public expose here on Monday that he expected some Rp 140 billion (about US$14.8 million) in proceeds from the initial public offering.

The proceeds, he said, will be used to open new outlets and support working capital and expansion for its subsidiaries, including the opening of 70 new outlets from 2008 to 2012.

He said 70 percent of the proceeds would be used to develop the outlets, 10 percent to support its subsidiary PT Wahanaartha Motorental with working capital, another 10 percent to expand another subsidiary, PT Tristar Transindo, and the remaining 10 percent to open a new subsidiary focused on reconditioned motorcycles and second-hand sales.

Robbyanto said the company would open 10 new outlets outside Jakarta and Tangerang this year, including in Banda Aceh.

For the company's reconditioned and second-hand business, he said they expected to set aside some Rp 15 billion from the IPO.

"Selling second-hand or reconditioned motorcycles is a promising business, especially in particular areas like Yogyakarta. That's why we're interested," said Robbyanto.

Robbyanto said the company also planned to acquire a motorcycle components sub-vendor and a motorcycle financing or insurance company at some point in the future.

All of these plans, he said, are expected to boost the company's sales to a minimum 223,000 units with a net income of some Rp 2.55 trillion this year.

Wahanaartha and its subsidiaries own 112 dealer outlets and 365 Astra Honda Authorized Service Station outlets, which provide after-sales services.

In 2007, the company suffered a 19.7 percent decrease in sales to 182,000 motorcycles from 218,000 units in 2006, as a result of intense competition with Yamaha. Its consolidated income fell slightly to Rp 2 trillion from Rp 2.18 trillion.

The 35-year-old company operates 18 branches located in Jakarta, Tangerang, Bandung, Yogyakarta and Medan. It owns three subsidiaries: Honda motorcycle and spare parts dealer and Federal oil seller PT Wahana Makmur Sejati, vehicle and goods delivery company PT Tristar Transindo and motorcycle renter PT Wahanaartha Motorental.

The company's quarterly sales increased to 57,000 motorcycles in the last quarter of last year from 45,000 units in the third quarter.

Its logistics subsidiary has increased its vehicle fleet from seven units in its first year in 2003 to 91 units in 2007.

In rentals, the company saw some 2,334 motorcycles renters in 2007 from only seven in its first year in 2004. (nkn)