Govt ready to guard PGN’s share price

The government said it will guard the share price of state gas utility company PT Perusahaan Gas Negara (PGN) with the money from green shoe after the latter’s listing on the stock exchanges, Investor Indonesia newspaper reported on Friday.

Green shoe is the term to refer to additional allotment of shares if the issue is oversubscribed during the initial public offering.

“Government has allocated money from green shoe which will be 9 percent of the total shares offered for stabilization of PGN share price during the first 30 days after the issue is listed,” assistant deputy for privatization and restucturization at the Office of the State Minister for State Enterprises Aloysius Kik Ro in Jakarta on Thursday.

Separately, Jakarta Stock Exchange (JSX) director of listing Harry Wiguna said the JSX’s evaluation revealed that PGN’s IPO has fulfilled all the requirements for listing on the main board.

Meanwhile, PGN president director WMP Simanjuntak expects the PGN’s IPO will be oversubscribed by 5 to 6-times.

PGN will raise Rp 2.5 trillion (around US$285 million) from its December 8-10 IPO and the stock will be listed on the Jakarta and Surabaya stock exchanges on December 15.

On Wednesday, the government decided to sell its 39 percent stake in PGN at a price of Rp 1,500 each share.

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. (*)