Atlas Resources plans an IPO to finance expansion

Coal miner PT Atlas Resources aims to raise as much as Rp 1.45 trillion ($167 million) in an initial public offering (IPO) to help finance its expansion plans.

The company plans to sell 783 million shares, or about 25 percent of its equity, according to Atlas?s underwriter, Indo Premier Securities. The shares will be offered at Rp 1,500 to Rp 1,900 per share to generate Rp 1.17 trillion to Rp 1.49 trillion. The IPO price is yet to be determined pending results of book-building process.

Atlas corporate secretary Aulia Setiadi said on Friday that most of the proceeds will be used to develop supporting infrastructure in its Sumatra coal mining hubs in Muba and Oku. Atlas also operates mining centers at Berau and Kubar in Kalimantan and in Papua.

The company is focusing on its Muba hub because it is the largest facility, with capacity set to reach 5.1 million tons a year by 2013. Atlas will invest $106 million on infrastructure there, Aulia said.

The company is currently waiting for an exploration permit for Papua, but output at the three other hubs is expected to reach 9.3 million tonnes in 2013.

Atlas?s current total capacity is about 2.5 million tonnes. In the first four months of this year the company?s total production was 400,000 tonnes. It produced 1.3 million tonnes in 2010.

Abdi Andre, Atlas?s president director, said in a statement that about $25 million of the IPO funds will go to compensation for the restructuring of the company?s supply contract with Hong Kong-based Noble Group Limited, with the aim of starting a new marketing and sales contract.

Another 27.5 percent of the proceeds will be set aside for acquisitions in new fields should an opportunity arise, Abdi said.

Book building and an international roadshow will be held from Oct. 10-18. Atlas sets to offer the shares to the primary market from October 31 to November 2 and follow by listing on the Indonesia Stock Exchange on November 8.

In the first half of 2011, Atlas booked Rp 402 billion in revenue, up 47 percent on the same period last year. Profit zoomed to Rp 46 billion in the year?s first half, up from Rp 2.5 billion for the same period in the previous year. (*)