Matahari Closes 13 Stores: Loss Of 617 Billion, But Can Still Buy IDR 550 Billion Shares In Bank Nobu

Illustration. (Photo: Doc. Matahari Department Store)

JAKARTA - A retailer owned by the Riady family or Lippo Group, PT Matahari Department Store Tbk, has experienced a serious impact due to the COVID-19 pandemic. The company codenamed LPPF shares had to give up 13 outlets to close, and recorded a large loss in the third quarter of 2020.

Quoting the disclosure of information from Matahari Department Store on the Indonesia Stock Exchange website, the company recorded a loss of IDR 617 billion in the third quarter of 2020. In fact, in the same period in 2019, they still booked a net profit of IDR 1.19 trillion.

This loss was in line with net income which fell 57.5 percent to IDR 3.3 trillion. Meanwhile, gross sales were recorded at Rp. 5.9 trillion or a drop of 57.6 percent over the same period last year.

Despite losing hundreds of billions, Matahari bought up 728,000,000 shares of PT Bank Nationalnobu (Bank Nobu) belonging to PT Inti Anugerah Pratama (IAP). The two parties signed a share sale and purchase agreement (PJB) on November 4, 2020.

Based on the company's official statement released from the IDX disclosure, Matahari stated that the transaction was carried out at a purchase price of IDR 755 per share. That way, overall Matahari spent Rp. 549.64 billion.

"PJB dated November 4, 2020 between Matahari and IAP in order to purchase a maximum share of Bank Nobu's shares amounting to a maximum of 728,000,000 shares, which is 16.4 percent of the paid-up capital of Bank Nobu by Matahari which has been carried out and will be made at a price of IDR 755 per share or total. Rp. 549,640,000,000, "explained Matahari management.

All of these transactions were executed in three stages which included the purchase of 400 million shares on 4 November 2020; purchase of 260 million shares on November 11, 2020; and purchase of 68 million shares on December 28, 2020. Through this transaction, Matahari believes there will be potential opportunities in significant business development for the company in the future.

"The benefits obtained are the banking and financial capabilities to build Matahari's financial services to customers and the ability to offer additional service features, including the establishment of a digital ecosystem for customers and companies so that they can get additional income," wrote Matahari management.

In addition, Matahari also believes that this transaction will strengthen its supply chain network through financing facilities for suppliers and customers. It is also claimed that the burden of withdrawing cash from Matahari outlets will decrease with this transaction.

Close 13 outlets

Matahari Department Store management recently stated that it would again close six outlets in several locations before the end of 2020. That way, there are already 13 Matahari outlets that have closed this year due to the COVID-19 pandemic.

Quoted from Matahari's disclosure of information on the Indonesia Stock Exchange (IDX) website, the company's management stated that 6 outlets are planned to be closed until the end of 2020. The details, as many as 4 outlets are in Java Island, 1 in the Bali region, and 1 in Sulawesi Island.

"Thus, the number of our outlets that will operate at the end of 2020 will be 147 from the previous 153," wrote the management of Matahari Department Store, quoted by VOI, Monday, November 30.

In addition, the company also ensures that it will not open new outlets in the fourth quarter of 2020 and the first quarter of 2021.

Matahari management also said, of the 147 operating outlets, 23 of them were included in the watch list to review performance and profitability. This was done to improve the performance of these outlets.

Matahari Management will also continue to communicate with shopping center managers or land owners in order to obtain lower rental costs.