•    HOME   
•    NEWS   
•    BUSINESS   
•    INTERNATIONAL   
•    TECH   
•    SPORTS   
•    LIFE & TIMES   
•    OPINION   
•    MY JAKARTA   
•    BLOGS   

Thailand’s biggest coal miner, Banpu, on Thursday said it was still committed to a long-term investment in Indonesian unit Indo Tambangraya Megah after selling an 8.7 percent stake for $395 million.

A subsidiary, Banpu Minerals, sold the stake to institutional investors through a market placement on Thursday, the company said in a statement. The transaction was expected to be completed on Tuesday.

Ten percent of the shares were offered to Indonesian investors while the rest went to international investors, according to a source from an Indonesian brokerage with direct knowledge of the deal. “The demand is huge, so only a small portion is left for local buyers,” the source said.

The price was at the low end of an indicative price range of between Rp 36,150 and Rp 38,500, which represented a discount of between 2 percent and 8 percent to the closing price of Rp 39,300 on Wednesday, according to the term sheet.

The news sent shares in ITM, Indonesia’s No. 3 coal miner, down as much as 7 percent. They closed 5.6 percent lower at Rp 37,100, its sharpest loss since May 21.

In Bangkok, shares in Banpu rose nearly 2 percent to their highest in nearly a month. At 11:50 a.m. local time, they were up 1.6 percent to 628 baht.

Despite the sale, Banpu, the fourth-largest coal miner in Indonesia with five mines there, will remain the largest shareholder with 65 percent. It said the sale would generate about $395 million for Banpu Minerals.

“The reduction in BMS’s shareholding in ITM will not affect its long-term commitment to ITM and the search for further growth opportunities in Indonesia,” Banpu said.

Banpu’s chief financial officer, Somruedee Chaimongkol, said the proceeds from the share sale would help strengthen Banpu’s balance sheet and support its five-year strategic plan.

After exhausting its coal reserves, Banpu has been looking to expand coal production offshore, especially off Indonesia, Australia and South Africa.

In July, Banpu announced plans to take over Australia’s Centennial Coal for $2 billion.

Banpu, through Banpu Minerals, appointed Goldman Sachs to run the international bookbuilding, while Indonesian brokerages Bahana Securities, Mandiri Sekuritas and Danareksa Securities are running the domestic side.

The Indonesian economy has seen a steady pick-up in investor interest over the past 18 months, thanks to a combination of political stability and improving economic growth sustained by strong domestic consumption and demand for the country’s abundant commodities, ranging from coal to palm oil.

The Jakarta Composite Index set a new record on Aug. 26 and is up nearly threefold from its October 2008 low, prompting a flurry of announcements for initial public offerings from firms keen to take advantage of the country’s improving global status.

Indofood CBP Sukses Makmur, a unit of giant noodle-maker Indofood Sukses Makmur, on Wednesday announced a $700 million IPO and is set to join a flood of domestic listings and other share offerings tapping strong investor appetite for Indonesian assets.

National carrier Garuda Indonesia and steel giant Krakatau Steel between them hope to raise a combined $800 million from IPOs this year.

Bank Mandiri’s rights issue could raise as much as $1.55 billion, while Bank Negara Indonesia said on Wednesday it aimed to raise as much as $1.1 billion from a rights issue in December.
 

Reuters