PGN hopes part of IPO proceeds will go to its coffer

State owned gas distribution company Perusahaan Gas Negara (PGN) hopes that the government will allocate part of the proceeds to be raised from the company?s initial public offering (IPO) for financing pipeline projects, Kompas reported on Thursday.

?If the total amount of the IPO proceeds reaches, for example, US$300 million; the US$200 million may go to the state budget and the remaining US$100 million to the company?s coffer,? PGN?s president director WMP Simanjuntak said.

He was commenting a statement made by Minister of Finance Budiono who said that all the Rp 1.5 trillion proceeds to be raised from the sale of the 30 percent of PGN shares to the public would be used to finance state budget.

?If the government could not reduce the amount of funds it expects from PGN?s IPO, then it should allow us to raise the percentage of shares to be sold to the public to 40 percent from 30 percent as initially planned,? he said.

Simanjuntak said that PGN needed additional funds of about US$100 million to finance the company?s pipeline projects which would cost about US$450 million. The other US$300 million will be financed by the Japanese government?s loans and the company?s own equity, he added. (*)