Golden Energy downsizes IPO plan

PT Golden Energy Mines said it will go ahead its initial public offering (IPO) on November 11, 2011. However, the portion of shares to be listed on the Indonesian Stock Exchange is reduced to 15 percent of the company?s enlarged capital, from earlier plan of 20 percent.

?Given the weak market condition, we review our capital need and we think (floating) 15 percent is enough,? said President Director of PT Sinarmas Sekuritas, Kokarjadi Chandra, after holding public presentation over the IPO plan on Friday. Sinarmas Securities is an underwriter of the company?s IPO plan.

Golden Energy plans to float 883.35 million shares on the Indonesian Exchange at a price of between Rp2,300 to Rp3,500 per share. ?Therefore, we expect to raise funds of around Rp2 trillion,? he said.

About 65 percent of the IPO funds will be allocated to strengthen the company?s capital expenditure and development of infrastructure to support the company?s coal mining operations. Over the next five years, the company plans to spend about Rp1.36 trillion or US$156.5 million in capital expenditure, President Director of Golden Energy Mines, L. Krisnan Cahya said.

About 25 percent will be used for working capital of the company and its subsidiaries and the remaining 10 percent will be allocated to repay its loan. At present Golden Energy?s outstanding debt stands at US$40 million. (*)