Bukalapak seeks to use IPO proceeds for acquisitions and debt repayment

PT Bukalapak.com Tbk, Indonesia’s first listed unicorn, plans to use part of its proceeds from the initial public offering (IPO) to make acquisitions and repay financing facilities used for business expansion company, the company said in a filing on Friday.

The company seeks to allocate a portion of the proceeds to the acquisition of businesses and their assets and to enter into joint ventures.

Earlier this year, the e-commerce giant raised $1.52 billion in its IPO, five times more than the original target of $300 million.

“There are potential new opportunities that are available post-IPO, in the form of acquisitions and investments in other companies, which could provide new business opportunities for the company,” the company secretary said. of Bukalapak, Perdana A. Saputro, on file at Indonesia Stock. Exchange.

As part of a change in plans for the use of proceeds from the IPO, the company is proposing to reduce the allocation for the parent company to 33% from 66% previously. It will, however, continue to reserve 34% of proceeds for its subsidiaries – PT Buka Mitra Indonesia (BMI), PT Buka Usaha Indonesia, PT Buka Investasi Bersama, PT Buka Pengadaan Indonesia, Buka Pte.Ltd. and PT Five Jack.

Bukalapak proposed to hold an extraordinary general meeting of shareholders on December 23, 2021, to seek its approval. During the meeting, the company will also seek approval to replace commissioner Lau Eng Boon, who is due to retire.

“The background for the proposed changes comes from the organic growth of the business, including the creation of new businesses that require funding for operational activities and the growth of their business activity,” the Bukalapak manager said.

It is speculated that Bukalapak is seeking to acquire businesses to support the Mitra business, its online-to-offline arm which uses online channels to generate offline sales. Mitra’s business has been Bukalapak’s main growth driver.

According to the company’s earnings report for the period ending September 2021, Mitra Bukalapak’s revenue increased by 298% year-on-year to Rs 496 billion during the January-September period. Mitra Bukalapak contributed 43% of the company’s revenue in September, up from 19% in the same period last year.

“If Bukalapak wants to use the proceeds from its IPO for business development, that’s actually a good sign because its plan was previously murky,” Sucor Sekuritas analyst Paulus Jimmy told DealStreetAsia when asked. asked to comment on the change in use of IPO proceeds.

Jimmy noted that the O2O business space remains promising for the company due to the lack of comparable competitors to Bukalapak.

“I think if the acquisition can accelerate growth instead of chasing profitability, it would be better at the time when there is no stiff competition from other players in the Mitra space,” a- he declared.

Bukalapak said its net losses narrowed in the January-September 2021 period on strong revenue growth.

The results, however, did not cheer Bukalapak stock, which closed at its lowest point consistently last week since Nov. 25. On Friday, Bukalapak shares closed at Rp490 each, down 2%. The stock has fallen 53.77% since its IPO. Jakarta Composite’s benchmark fell 0.69% and closed at 6,537.5.

Tana T. Thorsen