PT Hero Supermarket Tbk (HERO) decided to sell IKEA Sentul City in Bogor for Rp 280 billion. Then what is the reason the company suddenly sells these assets?
Launching information disclosure on Wednesday (1/9/2021), HERO’s management explained the background of the company selling IKEA Sentul City, one of which was because the company was facing difficult times due to the COVID-19 pandemic.
HERO’s balance sheet position has also decreased significantly over the last 12 months by recording a net cash position of Rp 168 billion on December 31, 2020 and subsequently reporting a net debt position of Rp 463 billion on December 31, 2020.
HERO has also announced that the company will focus on increasing its investment in IKEA, Guardian and Hero Supermarket after deciding to close all of its Giant chains.
“This transaction will give the Company the ability to monetize illiquid assets at fair market value and provide additional balance sheet flexibility to the Company,” the management wrote.
The proceeds from this transaction will be used by HERO to reduce loan facilities and support the Company’s working and operational capital needs. So that it is expected to have a positive impact on the Company’s financial condition created by debt payments and provide the Company with financial flexibility to support future growth initiatives.
The Company is expected to be able to record revenue from the sale of IKEA Sentul City assets which will increase the book value of equity on the Company’s balance sheet.
The sale of IKEA Sentul City itself is an affiliated transaction. The company sold it to PT Archipelago Development (APD). HERO and APD have the same shareholders namely Mulgrave Corporation BV and The Dairy Farm Company Ltd.
In Hero Mulgrave Corporation holds 63.59% shares and The Dairy Farm Company holds 25.71%, the rest is owned by PT Hero Pusaka Sejati 2.68% and 8.05 in the community. Meanwhile, in APD, the shares are only owned by Mulgrave Corporation as much as 25% and the Dairy Farm Company by 75%.
For IKEA Sentul City itself, it is currently being leased to HERO’s subsidiary, RUMAH, through a lease agreement. After going through negotiations, the company finally sold IKEA Sentul City to APD which would later be rented out again to HOME.
See also the video when ‘IKEA Wants to Open in Cakung, Anies Wants Workers from DKI’:
(das / fdl)