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Friday, February 5, 2010

Borneo & Harum Energy to have IPO: Mining firm gets right momentum to hit bourse

Friday, 05/02/2010 00:00 WIB

Irvin Avriano A.

Borneo & Harum Energy to have IPO: Mining firm gets right momentum to hit bourse

JAKARTA: Two holding coal mining firms, PT Borneo Lumbung Energi and PT Harum Energy, plan to hit the stock market in semester I/2010 targeting to tap some US$500-700 millions proceeds.

Some investment bankers said Borneo Energy, an affiliate company to the Renaissance Capital, and Harum Energy, mostly owned by Tanito Harum Group and mining business owner Kiki Barki, have assigned underwriters.

"Borneo Energi targets to tap some US$200 -US$300 million proceeds [or IDR1.87 -2.81 trillion], and Harum Energy US$300 -US$400 million [or IDR2.81 -3.74 trillion]," he said to Bisnis yesterday.

Borneo, with 100 percent share ownership of PT Asmin Koalindo Tuhup in Central Kalimantan, is the coking coal mining company which will sell 20-25 percent shares to market.

Harum Energy, possessing PT Tanito Harum, is the thermal coal company for power plant supply, is possibly to sell 30 percent shares to market in the IPO.

Borneo appointed CIMB Securities as the underwriter for domestic and regional markets which will be possibly assisted by Sinarmas Sekuritas.

The company is in process of underwriter selection to handle the IPO at international market. "It might go to the Morgan Stanley Asia Indonesia [currently chaired by President Director Andy Purwohardono, the former President Director of PT Danareksa Sekuritas]," he added.

When asked, I Wayan Gemuh, Head of Corporate Finance of CIMB Securities, could barely give any comment.

Hardianto, Borneo Director, said he had not been informed about the IPO here.

Bisnis resource said Borneo will use some of the IPO generated proceeds to increase the production capacity of 3.6 million tons into 5 million tons per year.

Asmini Tuhup now produces 2.4 million tons of coal per year. It has been processing the purchase of supplementary equipment and improving infrastructure to bolster the capacity of 3.6 million per year before August this year.

"The IPO fund will later be allotted to pay debt to the local and overseas banks consortium," he said.

The coking coal produced by Asmin Tuhup is 8,200 kcal and the commodities here go to export markets. The hard coking coal price now is US$175 per ton. The total of resources quantity of the mining is 240 million tons of coal.

Harum Energy appointed four underwriters, namely Goldman Sachs, Deutsche Securities, Mandiri Sekuritas, and Ciptadana Securities. Goldman and Deutsche will later help sell the shares to overseas market, and Mandiri and Ciptadana for domestic markets.

President Director of Ciptadana Ferry Budiman Tanja was not available for comment on the IPO.

Director of Investment of Bank Mandiri Sekuritas Iman Rachman declined to comment. "It'd better to ask about it to the emitter."

Harum Energy last year sought US$200 million loan to refinance debt and working capital. Harum had appointed DBS Group Holdings Ltd to seek the loans.

Analyst of PT AAA Sekuritas Herman Koeswanto said this year is deemed the right momentum for mining and energy firms to have IPO amidst the high stock valuation of the sector.

"With high stock valuation here, new emitter has great potential to have either high valuation. If they have fundamental capacity equals to the emitter at the bourse now, the valuation will surely be lifted up," he said.

Analyst of PT Danareksa Sekuritas Metty Fauziah said the coal price in 2010 stood at the level of US$85 per metric ton following the global economy recovery.

"Coal demand from China remains high as most of their power plants need coal. The second phase of 10,000 MW projects in Indonesia also uses coal." (Bisnis/iaa/ags/wiw)

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