Bisnis Bali offers the analysis that while there is a relatively large potential for companies in Bali to go public, most companies in such a positions are reluctant to take the step towards launch an Initial Public Offering (IPO).
Based on available data, only one company in Bali has made an IPO – Bukit Uluwatu Villa. That company, working in the areas of villa development and property, has achieved some success in the share market as evidenced by a climb in their traded share price over a relatively short period of time and the billions of rupiahs the IPO has earned that company for business expansion efforts.
The Chief of information for the Capital Market in Bali, I Gusti Agung Alit Nityaryana, says the courage of companies in Bali to go public remains limited. Most Balinese companies still rely on bank credit to finance business expansion, even though the cost of borrowed money is far more costly than seeking capital from the share market.
There are also tax advantages to be obtained by companies that go public. The tax law of 2008 grants lower tax rates to companies that offer at least 40% of their equity to the public. Nityaryana added, “there are still many other advantages to be had by going public.”
Alit insisted that it is not difficult for companies to go public. The main requirement is that companies must be prepared to be transparent and undertake good corporate governance. He said a major obstacle to Bali companies making public share offerings is that the candidate companies are family-owned and unprepared to be open about all aspects of their business.
“We are in the process of seeking out companies in a position to go public,” Alit added.
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