Borneo plans IPO early next year on coal recovery momentum

Petromindo|Dasir

East Kalimantan coal mining company PT Borneo Olah Sarana plans to launch an initial public offering (IPO) in the first quarter of next year to raise funds to help finance expansion program, Kontan reported on Saturday.

The paper quoted Borneo Finance Director Widodo Nurly Sumady as saying that the company plans to register the IPO plan with the Indonesia Stock Exchange in December, and expects listing in the first quarter of 2018.

He said that the company wants to launch IPO to take advantage of the current coal price recovery.

While did not disclosing the proceeds target and the size of shares to be sold the public, Widodo said that the proceeds will be used to finance expansion of its coal mines as out of its total 16,000 ha coal concessions in West Kutai Regency, East Kalimantan, run by four subsidiaries, only around 10 percent has been developed.

Borneo?s concession run by subsidiary PT Bangun Olah Sarana Sukses is now the only producing concession. This year, production is estimated to reach 400,000-500,000 tons, but the company plans to nearly double production to 800,000 tons next year.

Borneo exports around 80 percent of its coal output particularly to Japan, with the remainders sold at home.

Borneo is one of the coal miners in Indonesia which have obtained funds from Japan Oil Gas Metal Corporation as part of strategy to secure coal supply for Japan. (*)