Archi Indonesia delays IPO

Gold mining company PT Archi Indonesia has decided to delay its planned initial public offering (IPO) this year due to weak response from investors during a book building process, Bisnis Indonesia reported on Thursday quoting two sources.

?The demand is only about 30 percent (of the target). The response of investors was not quite good,? said one of the sources.

Corporate Secretary of Archi Indonesia, Edgar Affandi declined to comment, saying that an official statement would be issued today (Thursday).

The company said in a recent prospectus that it wanted to raise around US$350 million from the sale of 43 percent shares via an IPO in December, which will be used to repay debt and finance acquisition. Archi is a subsidiary of Rajawali Corpora, which is owned by tycoon Peter Sondakh.

Archi currently has 100 percent shares in two producing gold mine in North Sulawesi, namely PT Meares Soputan Mining and PT Tambang Tondano Nusajaya. In 2013, both mines produced 152,000 ounces of gold equivalent in 2013.

The company also has a 35 percent stake in ASX-listed mining firm Augur Resources Limited, which owns a 45 percent stake in gold and copper project in Wonogiri, Central Java.

Archi plans to use part of the IPO proceeds to acquire PT Smart Mining Resources (SMR), which controls 55 percent of the Wonogiri project. SMR is owned by Peter. When the acquisition is completed, Archi will effectively control 70 percent stake in the gold and copper project. (*)