ABM Investama to raise more than Rp 1.7t

Integrated energy solution provider company PT ABM Investama plans to sell its shares in an initial public offering (IPO) scheme to raise between Rp 1.78 trillion (US$197 million) and Rp 2.56 trillion.

The company plans to sell its shares at a range of Rp 3,250 (36 US cents) to Rp 4,650 apiece.

“We are offering at a maximum of 20 percent of our shares,” ABM president director Andi Djajanegara said during the company’s public disclosure on Tuesday.

That 20 percent portion is equal to 550,633,000 shares.

According to Andi, ABM will use 66 percent of the raised funds to support its subsidiaries’ expansion efforts.

Currently, ABM owns coal production company PT Reswara Minergi Hartama, contract mining company PT Cipta Kridatama, integrated logistics company PT Cipta Krida Bahari, power solutions company PT Sumberdaya Sewatama and engineering services company PT Sanggar Sarana Baja.

Another 27 percent of the total funds will be allocated to pay debts to Bank DBS and Bank Permata, while the remaining 7 percent will be used as working capital.

ABM will begin to offer its shares on Nov. 28 to 30, and expects to list them at the Indonesia Stock Exchange on Dec. 6.

ABM appointed PT Macquarie Capital Securities Indonesia and PT Mandiri Sekuritas as underwriters for the IPO.

The company also provided an allotment option for the shares, also known as greenshoe stocks, in which the underwriters can buy up to an additional 10 percent of the offered shares.

The option is needed to stabilize share prices in case the demand exceeds initial expectations.

ABM reported a 291.6 percent increase in net profit to Rp 208.2 billion in the first half of the year, up from Rp 53.2 billion in the same period last year.

ABM consolidated’s revenue rose 26.5 percent to Rp 2.78 trillion in the first half of the year, up from Rp 2.19 trillion in the same period last year.

Coal mining and contractor mining were the main contributors to the company’s revenue increase, accounting for Rp 376.4 billion and Rp 1.14 trillion, respectively.

ABM director Yovie Priadi said his company targeted to produce as much as 2.7 million tons of coal by the end of the year.

“In the next two or three years, we also want to raise production capacity of our mining in Aceh and South Kalimantan to 7.5 million tons and 5 million per year, respectively,” Yovie said.

Yovie also said that ABM was in the process of sealing new contracts on coal services.

“We will sign two or three contracts worth around $20 million to $60 million in the near future,” he said.

Andi said ABM would allocate more capital to develop of its mining location in Aceh.

“Capital expenditure is expected to increase by around 30 to 40 percent from this year,” Andi said.

ABM has spent Rp 2.2 trillion in capital expenditures this year. (rcf)