IPO Armadian hit more than US$100 million

The shareholders of 51 percent shares of PT Berau Coal, PT Armadian Tritunggal, seek initial public offering (IPO) by end of the year which is projected to tap some US$100 million fund.
Handy P. Soetedjo, the Director of Armadian, said with the IPO, the Armadian capitalization structure is expected to be stronger. This goes along with Berau holding company to boost up the coal production up to 20 million tons of coal annually.
"We want to give chances to public and other strategic partners to jointly develop an efficient, eco-friendly coal mining industry and to take important role to provide coal energy supply for domestic and international needs," he said in press release yesterday.
Berau shareholders now appointed PT Bahana Securities as the underwriter.
My source said Bahana is assisted by the overseas securities companies, including Bank of America-Merrill Lynch & Co, and Deutsche Bank AG.
"The IPO is scheduled by end of the year and the generated fund might stand at US$100 million," he said last night.
Other source said the IPO pricing actually could become the price setting for Berau strategic divestment.
Berau Coal is the first generation coal mining contractor founded in 1083. the mining concession of Berau Coal covers 118.4 square kilometers areas in the northern of East Kalimantan or 700 kilometers from Balikpapan.
The current shareholders of Berau are Armadian, Rognar Holding BV with 39 percent ownership, and Sojitz Corporation with 10 percent. The owner of 100 percent Armadian shares is PT Risco under the control of business owner, Rizal Risjad.
The target of coal production of Berau Coal this year is 15 million tons with 5,000-6,000 kilo calories energy per ton. Berau coal here is to meet the domestic needs and international markets such as Chile, China, Hong Kong, India, Japan, South Korea and Taiwan.
President Director of Berau Coal Bob Kamandanu was optimistically to increase the coal sales contract volume next year along with the rising production target into 18 million tons as from the 15 million tons this year.
Up to end of the year, Berau gets 14.2 million tons of coal contracts. The sales contract of 700,000 tons of coal to two Chinese companies which will end by March 2010 still has potential for further development.
Berau is estimated to tap above US$150 million net profit this year or rising from the last year realization worth US$80 million due to the sales volume and price hike.
The financial condition will remain well next year despite the fear sparked by other firms on the sluggish revenue. Berau Coal is determined to mount the production volume and open sales contract with the existing buyer.
Based on CIMB research released on June 12, 2009, there are some positive factors for coal sectors in Indonesia. The higher demand for coal and international price is predicted to last until 2011.
The coal emitter stock price in Indonesia is still discounted if compared to the similar overseas companies. The average estimated price to earning ratio (P/E) of the Indonesian coal emitter this year is 9.3.
P/E of PT Bumi Resources Tbk is at 8.4, or the lowest among the other coal shares P/E. based on the assumption of the similar industry P/E of 93, Berau Coal market value might stand at US$716.1 million.
Based on data of Bloomberg, P/E of Bumi yesterday stood at 9.18, P/E of PT Tambang Batubara Bukit Asam Tbk and PT Indo Tambangraya Megah Tbk was 11.88 and 11.99.
P/E of PT Adaro Energy Tbk and PT Indika Energy Tbk shares stood at 26.82 and 11.38, and P/E of PT Bayan Resources Tbk 742.86. The average P/E of coal emitters stood at 51.47.