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lthough it has not yet begun production, mining company Merdeka Copper and Gold received a warm welcome from investors during its debut on the Indonesian Stock Exchange (IDX) on Friday.

Listed under the code MDKA, Merdeka saw its shares increase sharply by 15 percent to Rp 2,300, from its initial public offering (IPO) price of Rp 2,000 just a few minutes after the market began trading. The price rally continued in the afternoon trading to reach its peak of Rp 2,530. However, it ended the day at Rp 2,000 before the close of the trading.

'€œNow that Merdeka is already a publicly listed company, we hope that we can expand more,'€ president director Adi Adriansyah Sjoekri said in a press conference following the share listing in IDX on Friday.

At the same occasion, Merdeka head of finance and corporate secretary, Ellie Turjandi, said that Merdeka shares had been oversubscribed almost 40 times during the public offering, which was held June 11-15.

The coal and gold miner, which reaped Rp 839.3 billion from the sales of 419.65 billion new shares in the IPO, plans to spend the funds from the IPO on subsidiary Bumi Suksesindo (BSI), which operates a gold mine in Banyuwangi, East Java.

It is said that BSI will spend 40 percent of the cash '€” or Rp 335.72 billion '€” settling its debts, and 10 percent will go to working capital. Meanwhile, another Rp 419.65 billion will be used for capital expenditures to finance mining infrastructure and processing facilities.

Merdeka Copper and Gold is the first miner in the exploration stage to be listed on IDX after a regulation allowing mining firms that have yet to start production to enter the bourse was introduced in November last year.

The company, which is located in Banyuwangi, East Java, and is said to have the second largest reserve in the country after Freeport Indonesia'€™s site in Papua, is set to start producing 67,000 troy ounces of gold and 700,000 troy ounces of silver in 2016.

Meanwhile, agriculture-focused lender Bank Rakyat Indonesia Agroniaga (BRI Agro) expects to raise about Rp 555.80 billion (about US$42 million) from its upcoming rights issue to further strengthen its capital structure.

BRI Agro operational and finance director, Sudarmin Sjamsoe, said with the additional capital, the bank would be able to enter the BUKU II capital category, which includes banks with capital of between Rp 1 trillion and Rp 5 trillion.

At present, BRI Agro is in the BUKU I category, which comprises banks with capital of up to Rp 900 billion.

In the planned rights issue, the subsidiary of state-lender Bank Rakyat Indonesia (BRI) is set to offer 5.58 billion shares at Rp 100 each.

Sudarmin said on Thursday that the company would use the funds to increase its lending to small- and medium-sized enterprises, which at present account for the bank'€™s total lending. '€œOur main aim is actually to upgrade our capital status to the BUKU II category,'€ Sudarmin remarked, adding that with the current status as a BUKU I bank, BRI Agro'€™s operations were limited.

BRI owns an 80 percent stake in the bank, Dapenbun pension fund holds 14 percent and the rest is held by the public.

BRI Agro is currently categorized as BUKU I by the Financial Service Authority (OJK) as its core capital is still around Rp 900 billion.

Based on an OJK regulation, banks with core capital under Rp 1 trillion are categorized as BUKU I banks and those with capital between Rp 1 trillion and Rp 5 trillion as BUKU II banks.

Meanwhile, mid-size and large banks with core capital of Rp 5 trillion to Rp 30 trillion are considered BUKU III banks. Banks with more than Rp 30 trillion in capital are placed in the BUKU IV

According to Sudarmin, with a BUKU II category, BRI Agro would likely attract more customers as it would be considered more reliable. '€œOur customers often ask about the status of our bank,'€ he said.

Majority shareholders BRI and the pension fund would be the main buyers of the new shares, which will be formally offered to the public on June 25. (agn)