PGN IPO price set at Rp 1,500 per share<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government has decided to sell the shares of state-owned gas
\nutility PT Perusahaan Gas Negara (PGN) via an initial public
\noffering (IPO) next week at Rp 1,500 per share, a senior
\ngovernment official said.<\/p>\n
Mahmuddin Yasin, deputy for privatization at the Office of
\nState Minister of State Enterprises, said on Wednesday that at
\nthat price level, the IPO would result in some Rp 2.5 trillion in
\nproceeds.<\/p>\n
He said that around Rp 1.30 trillion of the proceeds would go
\nto the state coffers, while the remaining Rp 1.2 trillion would
\ngo to PGN to help finance the company's gas pipeline project.<\/p>\n
The government will sell 39 percent shares in PGN. Initially,
\nthe IPO was set at a price range of Rp 1,300 to Rp 2,100.<\/p>\n
The PGN shares will be open for subscription on Dec. 8 to Dec.
\n10, and the stock will be listed on the Jakarta and Surabaya
\nStock Exchanges on Dec. 15.<\/p>\n
The PGN IPO will be the government's last privatization
\nprogram for this year. It comes following the successful IPO of
\nstate-owned Bank Rakyat Indonesia (BRI) last month.<\/p>\n
The government has targeted to raise Rp 6.4 trillion in
\nprivatization proceeds this year, to help finance the 2003 state
\nbudget deficit. But with the PGN IPO, privatization revenue will
\nreach Rp 7.46 trillion, which includes Rp 2.5 trillion raised
\nfrom the IPO of Bank Mandiri, Rp 1.16 trillion from the sale of
\nshares in publicly listed cement maker PT Indocement and Rp 2.5
\ntrillion from BRI.<\/p>\n
Elsewhere, Mahmuddin said that the PGN IPO price represented
\n2.7 times its book value or a price earning ratio of 13.2 times.<\/p>\n
He said that at this price level, demand for the IPO was three
\ntimes oversubscribed, of which 65 percent of the demand comes
\nfrom foreign investors and the remainder from local investors
\nmostly institutional investors. He added that most investors
\nwanted to buy the PGN shares at a price level of Rp 1,300 per
\nshare.<\/p>\n
Meanwhile, PGN president WMP Simandjuntak said that the
\ncompany planned to issue up to US$400 million worth of bonds
\noverseas in the first quarter of next year to help finance its
\ngas pipeline projects.<\/p>\n
He did not provide details of the bond plan, but in August,
\nthe company issued $150 million of 10-year bonds at a yield of
\n7.75 percent.<\/p>\n
Simandjuntak said that the new bond plan was necessary because
\nproceeds from the IPO was not sufficient to finance the gas
\npipeline transmission project from South Sumatra to West Java in
\na bid to cap the gas shortage on the heavily populated Java
\nisland.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pgn-ipo-price-set-at-rp-1500-per-share-1447893297",
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"sponsor": "Okusi Associates",
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