Adaro Energy, the holding company for Indonesia’s second-largest coal miner, on Thursday increased its planned public offering to Rp12,000bn ($1.3bn), which stands to make it the largest IPO in the country’s history.
Adaro is 36 per cent owned by a group of investors including Goldman Sachs, Citigroup, Farallon Capital, the Government of Singapore Investment Corporation and the Kuok Group. Teddy Rachmat, an Indonesian businessman, and Saratoga Capital, each control 32 per cent.
Indonesia is the world’s largest exporter of thermal coal, which is widely used in the power sector. Adaro plans to use 91.2 per cent of the IPO proceeds to raise its stakes in the Agalia business group, a holding company for mining interests, and another affiliate, and to repay debts.
The remaining funds will be used to acquire stakes in local companies and bolster Saratoga Investama Sedaya, Adaro’s investment unit.
Saratoga Capital’s president had said in March that Adaro would raise $500m. The figure was raised to about $1bn earlier this week, then increased again yesterday.
Adaro’s IPO would eclipse the $1.05bn raised by Indosat, a telecoms company, in 1994. Adaro’s would be the eighth largest in the world this year, according to Thomson Reuters.
The offering is due next month, shortly after Indika Inti Energy, the parent of the country’s third largest coal miner, Kideco Jaya Agung, plans to sell 18 per cent of its share capital to raise $300m.
Nick Cashmore of CLSA in Jakarta said he expects Adaro to be popular because demand for coal is still “extremely strong”.
“There are lots of people who missed the rally in Bumi [Resources] so they want to get into this one,” he said.
Bumi, Indonesia’s largest coal miner, has seen its share price rise 450 per cent in the last year. Its market cap is now $16.1bn
● South Korea’s Tong Yang Life Insurance is seeking a domestic listing in the second half to become that country’s first listed life insurer, Song Jung-a reports from Seoul. Tong Yang has submitted an application to the Korea Exchange for an initial public offering, which is estimated to raise about Won340bn Daewoo Securities is the lead manager.
