PGN may list its shares only in domestic stock exchanges

The government is considering to list the shares of the state-owned gas utility company PT Perusahaan Gas Negara (PGN) only in domestic stock exchanges, Investor Indonesia newspaper reported on Wednesday.

This idea came to the light after the delay in the process of PGN’s IPO (initial public offering). Initially the IPO was scheduled to be launched on November 20.

According to Mahmuddin Yasin, deputy to the state minister for state enterprises in the restructurization and privatization section, PGN’s IPO must be launched this year.

“If needed, it will be listed only inside the country (in the domestic stock exchanges),” he said in Jakarta.

PGN, earlier made a plan to list it shares on the Singapore, London stock exchanges. But this now has been postponed.

PGN’s president W.M.P. Simanjuntak said recently that the company’s 2001 financial report will be reaudited by Ernst & Young (E&Y).

The same report was already audited by Arthur Andersen and the audit result was not accepted due to the black listing of Arthur Andersen following its alleged involvement in Enron case in the U.S.

Further, the audit will be repeated in order to fulfill the requirement as laid down under the Regulation S and 144A. It will strengthen PGN ‘s position during the IPO process.

Because of this re-auditing process, the IPO was postponed to December 12, 2003.

Separately, State Minister for State Enterprises Laksamana Sukardi expects that PGN will not delay its initial IPO despite the company’s ongoing re-auditing of 2001 financial report, Investor Indonesia newspaper reported on Saturday.

Everybody, who are involved in the PGN’s IPO, is working according to the tight schedule, Laksamana said.

“Just now I came to know (about reauditing). It is a process of going public, which pushes the company to be transparent and make improvements in all aspects,” Laksamana said before attending the House of Representatives’ budget committee meeting on Friday in Jakarta.

When asked about possible delay in PGN’s IPO, he said, “hopefully, not. If possible, we will process it with a time frame.”

The gas utility company plans to raise up to Rp 3.6 trillion or about US$400 million from the sales of its 30 percent stake through an initial public offering (IPO).

PGN needs huge amount of investment to complete several gas pipeline projects like Grissik-Pagar Dewa in South Sumatra, Duri (Riau)-Belawan (North Sumatra) pipelines and another pipeline from Riau to Singapore. (*)