Foreign investors set to take a 74% stake in PGN?s IPO

Foreign investors, mostly institutional investors, are set to buy around 74 percent of shares of state gas utility company PT Perusahaan Gas Negara (PGN) during its initial public offering IPO this week, Investor Indonesia newspaper reported on Tuesday.

This will be more higher than earlier expected of 65 percent of shares on offer.

?More foreign institutional investors are interested in buying PGN shares than the national investors. For comparison, the figure will be 74 percent for foreign and 26 percent will be for national. But this will be visible at the end of the offer,? PT Danareksa Sekuritas president director Wahzary Wardaya told Investor when latter contacted the former on Monday.

However, on the first day of the PGN?s offering, there was no rush for PGN shares on Monday in Jakarta. In Surabaya also, there was similar situation on Monday.

PGN will raise Rp 2.5 trillion (around US$285 million) from its initial public offering (IPO) this week.

The government decided to sell its 39 percent stake in PGN at a price of Rp 1,500 each share through IPO.

PGN will sell up to 1.69 billion shares of which 1.29 billion will be issued in the first stage. The remaining shares will be issued if the first batch is oversubscribed.

From the expected proceeds from the IPO, the government will get around Rp 1.30 trillion and the remaining Rp 1.2 trillion would go to PGN to help finance its gas pipeline project.

PGN's IPO comes after the successful offering of state-owned PT Bank Rakyat Indonesia, which last month offered 4.76 billion shares, or a 40.5% stake, raising $490 million.

PGN's IPO, which opened for subscription on Monday, will be ended on Wednesday and the stock will be listed on the Jakarta and Surabaya stock exchanges on December 15. (*)