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Saratoga prepares two subsidiaries to go public
Investment company PT Saratoga Investama Sedaya is preparing two of its subsidiaries to go public so that they will be able to stand on their own feet to finance their business expansion, the companyâs senior executive has said
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nvestment company PT Saratoga Investama Sedaya is preparing two of its subsidiaries to go public so that they will be able to stand on their own feet to finance their business expansion, the company's senior executive has said.
Saratoga, which will launch its own initial public offering (IPO) next month, is getting its subsidiaries ready to take the same step to strengthen their capital structure.
Power company PT Medco Power Indonesia and oil refinery firm PT Tri Wahana Universal should be ready to enter the stock market within the next two to three years, Saratoga president director Sandiaga Uno said.
'We will boost their performance so that they will be prepared in terms of governance, finance and size for the stock market,' he said during a press conference in Jakarta on Wednesday.
Saratoga, founded by Sandiaga and Edwin Soeryadjaya, currently has 17 subsidiaries, nine of which are public companies listed in Jakarta and overseas.
The Jakarta-listed subsidiaries include coal miner PT Adaro Energy (ADRO), telecommunications tower operator PT Tower Bersama Infrastructure (TBIG), plantation firm PT Provident Agro and automotive distributor PT Mitra Pinasthika Mustika (MPMX), which floated its shares on the Indonesian Stock Exchange (IDX) on Wednesday.
Medco Power, which is 12.3 percent owned by Saratoga, owns and operates a 300 megawatt (MW) power plant in Batam, Riau Islands province, and a 30 MW plant in South Sumatra province.
It also operates and maintains a 1,320 MW power plant in Jepara, Central Java province.
Tri Wahana, in which Saratoga has a 35 percent stake, produces high-speed diesel, straight-run gasoline and vacuum tower bottom at its refinery in Bojonegoro, East Java province, according to information available on Tri Wahana's website.
Sandiaga said that Saratoga was confident the subsidiaries would soon be able to stand on their own feet. 'We've always encouraged the companies' CEOs to grow and we will supply the capital,' he added without providing details.
Meanwhile, as previously reported, Saratoga is looking to go public with the IPO expected to take place from June 8 to 20. It plans to sell between 271 million and 430 million shares, or equal to 10 percent to 15 percent of its enlarged shares.
Saratoga, which will sell its shares at a price range of between Rp 6,100 and Rp 7,800, expects to reap between Rp 1.65 trillion (US$168.51 million) and Rp 3.35 trillion in fresh funds from the IPO.
It has appointed PT Deutsche Securities Indonesia, PT Indo Premier Securities and PT UBS Securities Indonesia to act as underwriters for the public offering.
Saratoga's book-building period will run until June 6. Indo Premier managing director Moleonoto The said that apart from Indonesia, Saratoga would also offer the shares in Hong Kong, Kuala Lumpur, London and Singapore. 'We hope to list the shares on the IDX on June 25,' Moleonoto said.
In a statement, Saratoga says it will use $50 million of the IPO funds to pay off the debt of subsidiary PT Saratoga Sentra Business due in January 2014.
It will also use 15 percent of the funds to increase its stake in Mitra Pinasthika and the rest to finance investments in the natural resources, infrastructure and consumer product and services sectors.
As of December 2012, Saratoga had Rp 12.91 trillion in total assets, while its liabilities and equity amounted to Rp 3.18 trillion and Rp 9.73 trillion, respectively.
