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Surya Esa to Use Funds from IPO to Fuel LPG Expansion
Indah Handajani | January 17, 2012

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Surya Esa Perkasa, an Indonesian energy company that produces liquefied petroleum gas, is set to raise Rp 152.5 billion ($17 million) from an initial public offering at the end of this month, its underwriter said on Tuesday.

David Agus, managing director of Equator Securities, the IPO underwriter, said Surya Esa had set the price of the offering at Rp 610 per share.

It plans to sell 250 million shares, equivalent to 25 percent of its total equity. The IPO is slotted for Jan. 25-27 and the shares will be listed on the Indonesia Stock Exchange (IDX) on Feb. 1.

Isenta Hioe, finance director and corporate secretary of Surya Esa, said the company would use proceeds to pay off some of its debt to Bank UOB Indonesia and expand its business, including an upgrade of its liquefied petroleum gas refinery in Palembang.

The company plans to increase the refinery’s capacity by 44 percent from the current 113 metric tons per day. Expansion work is expected to be completed in 2014, at a cost of $15 million. Isenta said Surya Esa was estimated to have booked a record $42 million in revenue last year on higher LPG price.

Desmon Silitonga, an analyst at Millenium Danatama Asset Management, said the future looked bright for Surya Esa thanks to the strong outlook for LPG and natural gas derivatives.

The government’s campaign to convert motorists to natural gases, he added, should also benefit Surya Eka. “The IPO shares are pretty cheap, too,” he said.

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