Jun 22, 2010

CS & Deutsche helps Krakatau Steel IPO

Credit Suisse (CS) and Deutsche Bank have been mandated as international underwriters on initial public offering of Indonesian's largest steel manufacturer PT Krakatau Steel. 
The two banks led roadshows in Hong Kong and Singapore, respectively, for the Ministry of State-Owned Enterprises in April. 
The government, as reported by IFR Asia, is expected to sell 20% of the company in the IPO, giving it a likely deal size of US$300 million-US$400 million. 
The three state-owned investment banks PT Bahana Securities, PT Danareksa Sekuritas, and PT Mandiri Sekuritas have already been mandated. 
It had been thought that the government would also add an American bank, but sources close to the deal thought the size would not justify it. The deal now looks likely to come to market in the fourth quarter before the similar sized IPO of airline Garuda, which is still restructuring debt.
Another source said Bank of America-Merrill Lynch aims to organize a roadshow for Minister of State-Owned Enterprises Mustafa Abubakar in domestic and overseas, including New York. "Merrill is likely to eye IPO of PT Garuda Indonesia," the source said.

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