Foreign investors seek more information on gas policy

State gas utility company PT Perusahaan Gas Negara (PGN) faced with questions regarding government’s policy on natural gas distribution, transmission and tariffs from foreign investors during its roadshow to Singapore in connection with its plan to sell up to 39 percent shares through initial public offering (IPO) next month, Bisnis Indonesia newspaper reported on Friday.

Aloysius K. Ro, the deputy assistant for the government’s restructurization and privatization of the agro industries, strategic industries and mining, has said that the interest from foreign investors for PGN shares is higher during PGN’s roadshow in Singapore, which began on Thursday.

“We don’t know exactly how many orders we received from foreign investors, but we will be knowing the same on Friday. They just needed clarification regarding gas distribution, transmission and tariffs, Aloysius told Bisnis from Singapore through telephone.

Foreign investors, generally, have no difficulties in understanding the sector’s development in connection with PGN’s IPO. Because, there is already a benchmark like PTT (Thailand) and CNOOC (China), Aloysius said.

“But they are still studying PGN’s internal (situation) and certainly they need more time to take decision, he said.

According to the plan, the roadshow will be held in Hong Kong on Friday. At the beginning of this week, the domestic roadshow was conducted in Surabaya and Medan.

Meanwhile, a source revealed to the Bisnis Indonesia that there are six institutional investors who approached the underwriter, PT Danareksa Sekuritas, of PGN's IPO.

They are workers social security company Jamsostek, Ciptadana Asset Management, Prudential, Bahana TCW, ABN Amro Investment Management and Schroeder Investment Management Indonesia.

PGN will list its shares on December 12, 2003.

It expects to raise up to Rp 3.6 trillion or about US$400 million from the sales of its 30 percent stake from the IPO. The size of the IPO can be raised up to 39 percent depending on demand.

PGN hopes that it could retain a half of the proceeds from the sale of the 30 percent shares to finance its expansion plan and to give the remaining 50 percent to the government's coffers.

The government has appointed PT Danareksa Sekuritas, ABN Amro-Rothschild and Credit Suisse Boston as underwriters of PGN's IPO.

PGN has set a net profit target of Rp 300 billion to Rp 400 billion for 2003. (*)