Evaluation of PT Trust Line Marine for Pre Initial Public Offering

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Datta, Adwitiya Amarendra and Harahap, Andrian and Lesmana, Cahyanto and Afriza, Eka Sri Dana and Melvin, Muhammad (2014) Evaluation of PT Trust Line Marine for Pre Initial Public Offering. Project Report. Sekolah Tinggi Manajemen IPMI, Jakarta. (Unpublished)

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PT. Trust Line Marine (TLM) is a private company internationally-accredited leader in marine solutions with a proven track record, with innovation and speed as key levers of growth, supported by safety as their highest priority. TLM are planning to do Initial Public Offering (IPO) in the next five (5) years and the financial indicators certainly require improvements in operation. In order to finance their growth to IPO, TLM have acquire capital by arranging the agreement with an investor in a Convertible Preferred Shares (CPS) in 2013. TLM also needs to ensure the performance and also benchmarked against other similar marine logistics and cargo transport companies in Indonesia. Our Group Field Project (GFP) scrutinizing TLM current practice by analyzing the shipping industry in global economic scope, PESTEL, industry analysis, SWOT, TLM’s line of business, capital structure and evaluate the new agreements into financing their growth for IPO. Based on our analysis (PESTEL, Industry and SWOT) we conclude that Cabotage Law has a significant impact to Company. TLM will face moderate rivalry among competitor by new entrants and have higher industry growth. Company skilled talent and experienced management are major factors in facing competition, while Company need to add strategic partners to increase their market share. Company current capital structure that has higher Debt Ratio than peers has a negative impact, because the increase of financial distress while tax shield benefit is irrelevant since the Company corporate income tax is final. Mezzanine financing will improve company’s capital structure by adding more equity to decrease current Debt Ratio. In preparing for IPO in 2017, Company face challenges in how to maintain their revenue growth and return on invested capital also cash flow generated from the investment. In anticipating change or revised of Cabotage Law in the future the Company should focus their strategy into differentiation of services especially for Oil & Gas support by maintaining and also adding talents which have expertise in providing those services. The company also should add new strategic customers, maintain their talent by systematic training program and career path planning to compete with existing and new competitors in the future. Increasing Company value before IPO can be achieved by maintaining their fourcornerstone value of corporate Finance, which consists of core of value, conservation of value, expectations treadmill, and best ownership. The Company also have to review current organization structure, management system and information technology to support their growth and transformation. Company capital structure can be achieved through internal funds, debt and equity (refer to pecking theory). The optimal capital structure of the company can be computed by using the lowest Weighted Average Cost of Capital (WACC), considering the tax shield are irrelevant for TLM. Company’s capital structure composition should comparable to the industry to minimize increasing financial distress and agency cost.

Item Type: Monograph (Project Report)
Subjects: H Social Sciences > HE Transportation and Communications
Divisions: Library > GFP (Group Field Project)
Depositing User: Dede Faujiah
Date Deposited: 20 Jan 2020 02:21
Last Modified: 22 Jan 2020 02:56
URI: http://repository.ipmi.ac.id/id/eprint/460

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