PGN expects to raise up to $400 million from IPO

State owned gas distribution company Perusahaan Gas Negara (PGN) expects to raise up to Rp 3.6 trillion or about US$400 million from the sales of its 30 percent stake during the initial public offering (IPO) later this year, Bisnis Indonesia reported on Thursday.

"If the book value of PGN reaches Rp 12 trillion, the value of the 30 percent shares that will be sold in the IPO would reach Rp 3.6 trillion. We are sure the book value of the company would be around Rp 12 trillion," said PGN's president director WMP Simanjuntak.

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 coffer.

The government has appointed PT Danareksa Sekuritas, ABN Amro-Rothschild and Credit Suisse Boston as underwriters of PGN's IPO. The percentage of the shares to be sold in IPO has not officially announced although PGN estimates that it would be around 30 percent.

The securities companies estimate the purchase of PGN's shares would be dominated by foreign investors given the bright prospect of the company's future. But they fear the IPO of the state owned Bank Rakyat Indonesia (BRI) which would be also launched in November would affect the sales of PGN's shares.

PGN expects to launch its IPO on November 21, only two weeks after the IPO of BRI, which would be launched early in the month. (*)