Tambang Timah to float 25% of shares in London

JAKARTA (JP): The state-owned tin mining company PT Tambang will list 25 percent, or 125.8 million, of its shares on the London Stock Exchange on Oct. 19, the firm's president Erry Riyana Hardjapamekas said yesterday.

He said in a statement that on the same day the company will also list another 10 percent, or 50.3 million, of its shares on the Jakarta and Surabaya Stock Exchanges.

He explained that the overseas offering will represent the government's divestment of ownership, while the shares offered domestically will be newly issued.

"The company expects to raise about US$200 million from the share offering," he said.

He said the company will submit $140 million of the proceeds from the share sales to the government.

Out of the other $60 million, 45 percent will be used to finance the upgrading of the firm's dredgers, 32 percent for the purchase of new production facilities, 17 percent for the expansion of its exploration activities, four percent for the improvement of its smelting equipment and two percent for the procurement of information equipment.

Erry said that the government has approved that the shares, each with a nominal value of Rp 500 (21.97 U.S. cents), will be sold at around Rp 2,450 ($1.07) to Rp 2,900 per share during an initial public offering period between Oct. 2 and Oct. 4.

He said that the government has appointed Barclays de Zoette Wedd of Britain as global coordinator for the share offering on the international market.

PT Niaga Securities, an affiliate of publicly-listed Bank Niaga, and PT Pentasena Securities, a company controlled by businesswoman Siti Hediati Prabowo, will act as underwriters for the share issue on the domestic market.

Erry said that the company's before-tax profit reached $22.8 million in the first six months of this year, while last year's before-tax profit was $35 million.

Tambang Timah has 490,000 tons of proven tin reserves in its mining concessions of 786,657 hectares in South Sumatra, he added.

There are currently two tin mining companies in Indonesia, Tambang Timah and PT Koba Tin. The latter is 25 percent owned by Tambang Timah and 75 percent by Radisson Gold Fields Corp. of Australia.(04)