Nov 17, 2010

Big names behind Borneo Energy IPO

The only hard coking coal producer in Indonesia PT Borneo Lumbung Energi & Metal Tbk (BORN) has determined the IPO final price at Rp1,170 per share, while demand is estimated to obtain 11 folds.
Who is stellar foreign funds participating on Borneo Energi IPO?
A source familiar with the matter said several big names in the global stock market have participated Borneo IPO.
"I heard several big names such as Government of Investment Corporation Singapore [GIC], Fidelity, BlackRock, Fortis, Schroder, Putnam Investments, Batterymarch Financial Management, Perry Capital Management, Public Mutual, Lazard, and Edmond De Rothschild," the source said.
Schroders in Jakarta has submitted US$110 million order for Borneo shares. But, they finally got allocation of about US$30 million.
Borneo determined to jack up the IPO size to 25% stake or 4.4 billion shares from the initial plan of 20% stake or 3.32 billion new shares at Rp1,170 per share. Foreign investors obtain 80% of Borneo allocation and the remaining goes to local investors.
CIMB Securities, Credit Suisse, and Morgan Stanley are the IPO underwriters for Borneo Lumbung Energy.
BORN plans to use 50% of the IPO proceed for debt refinancing, to Sinarmas Sekuritas, CIMB Bank, and RZB Bank.
Borneo has secured 1 year contract to supply 1 million tons coking coal to Zhonglian Resources. Borneo is in talks with one Chinese buyer to supply another 1 million tons and one Taiwanese buyer for 3 month contract.  

Disclosure: No position at the stock mentioned above.  

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