| Summary: | The aim of this study is to estimate the fair value of Balai Pustaka (State
Owned Enterprise) in relation to restructuring program carried out by the
Government. At the moment, Balai Pustaka is experiencing financial problems or
financial distress, as indicated by the continuing net losses since 2005 and capital
deficiency or negative book value equity of the firm. The result of these
assessments can be used to determine wether the restructuring program capable of
securing the State Capital has been invested in Balai Pustaka. Another purpose of
this study is to analyze the causes of financial distress experiencing by Balai
Pustaka. Both objectives are closely linked because by identifying the cause of
financial distress and the remedial measures undertaken will make the selection of
inputs be better for the valuation.
The data analyzed in this research were obtained from financial statements
of Balai Pustaka which have been audited for the Year 2004 to Year 2009, beta
risk data comparison companies listed on stock exchanges in the sectors of
advertising, printing, and media, data comparison company stock prices and stock
index data for a period of Year 2008 to Year 2010 in order to estimate the
unlevered industry beta since Balai Pustaka is a private firm. The estimated fair
value of the firm is carried out using the income approach by applying the
discounted cash flow method, using free cash flow to the firm model, and the
asset approach by applying adjusted book value method.
The estimation using discounted cash flow method has result a fair value of
Rp103.436 billion or, after calculating the long-term debt the estimation of fair
value of equity is Rp20.603 billion. While the estimation using adjusted book
value method has resulted an estimated fair value of equity at Rp5.608 billion.
Reconciliation of value by using both methods after considering their weights and
lack of marketability discount (DLOM) has resulted an estimated fair value of
Balai Pustaka�s equity at Rp11,798 billion or equivalent to Rp117,98 million per
share.
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