Oct 7, 2010

Borneo Energi eyes US$400 mio IPO

PT Borneo Lumbung Energi & Metal (BORN), parent of Indonesia’s hard coking coal producer, PT Asmin Koalindo Tuhup, seeks US$400 million fresh fund from the 20% or 3.32 billion shares from initial public offering (IPO) planned to be realized by the upcoming November.
An executive familiar with such corporate action said that based on the given target, the 100% shares valuation or nearly 16.59 billion stocks of Borneo Energi may reach US$2 billion.
“From the US$400 million fresh fund derived from such IPO, Borneo Energi shall exploit the fund to enhance its production capacity, refinance its debt and to strengthen its working capital,” he said today.
To realize such IPO, Borneo Energi has appointed three underwrites namely CIMB Securities, Credit Suisse Indonesia and Morgan Stanley.
The executive further elaborated that Borneo Energi, 99% stake owned by PT Republik Energi & Metal. Borneo controls 99% stake in Asmin Koalindo Tuhup and 99% shares in PT Borneo Mining Services.
Indonesia’s stellar entrepreneurs Samin Tan and Surjadinata Sumantri, founders of Renaissance Capital, controlled PT Republik Energi & Metal.
Asmin Koalindo controls coal mining concession in Murung Raya, Central Borneo. This coal-mining site is divided into two main areas namely Kohong and Telakon.
When being asked for confirmation, President Director of Borneo Energi, Geroad Jusuf said that he could not disclose any comments yet concerning this IPO since this period of time is still classified as blackout period.
The source said that Borneo Energi’s coking coal production capacity reached 2.4 million ton in the end of December last year.
“The company targets to increase its production capacity into 3.6 million ton by 2010 and 5 million ton by 2011.
Borneo Energi produced 752,000 ton hard coking coal as the mixture component in steel fusion in the end of June 2010. In the meantime, the sales volume reached 583,100 ton during the first half of 2010 with average sale price US$180 per ton. Borneo Energi booked US$120 million-US$130 million revenue in the end of June 2010.

Disclosure: No position at the stock mentioned above.

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