BNP Paribas cancels plan to underwrite PTBA?s IPO

PT BNP Paribas Peregrine has pulled out from its position as the co-underwriter of the state owned coal producer PT Tambang Batubara Bukit Asam (PTBA)?s initial public offering (IPO) due to fears over the low demand from foreign investors, Bisnis Indonesia reported on Friday.

Sources told the daily that the joint venture securities company would only act as a selling agent in the sale of the coal producer?s shares. The securities company?s executives were, however, not available for confirmation.

PTBA has appointed state owned securities company PT Danareksa Sekuritas as the underwriter for the sales of its shares to local investors and PT BNP Paribas Peregrine as the underwriter for sales of shares to foreign investors.

According to an initial plan, the coal producer which is based in Tanjung Enim, South Sumatra, will sell about 35 percent of its shares to the public as part of the government?s privatization program. About 35 percent of the shares will be allocated to foreign investors.

State Minister for State Owned Enterprises Laksamana Sukardi said that PTBA?s IPO would continue as planned despite the continued declines in share prices in the local market in the past several days. "PTBA?s IPO will continue while monitoring the market situation," the minister said.

The share prices in the local market continued falling during the past several years amid concerns over the security in the country following the massive explosion in Bali late last week. The bloody explosion which hit several entertainment centers killed over 180 people mostly tourists from Australia. (*)