PGN?s IPO oversubscribed by 8.6 times

The initial public offering (IPO) of state gas utility company PT Perusahaan Gas Negara (PGN) has succeeded in attracting the attention of both foreign and domestic investors as the issue was oversubscribed by 8.6 times, Investor Indonesia reported on Friday.

This figure is far higher than the prediction of 3.4 times at the price of Rp1,500 or 4.4 billion shares during book-building process.

Until Thursday night, there was no consensus on the final figure of the IPO among its underwriters.

According to one Investor?s source, Credit Suisse First Boston (CFSB) has not given its consent but two other underwriters PT Danareksa Sekuritas and PT ABN Amro Asia Securities have already agreed on the final figure.

Danareksa president director Wahzary Wardaya declined to disclose the final figure of the IPO on Thursday to the Investor, but only saying the issue was a success and the result was above the target.

?I am unable to give the figure because the calculation process is still going on and it is clear that it is above the target,? Wahzary said.

The result, according to Wahzary, was in fact easily predictable given the healthy fundamentals of PGN. Not only that the IPO came at the right time, because the market condition was conducive.

According to one estimate, foreign investors, mostly institutional, may get 74 percent of PGN?s IPO shares.

PGN is expected to raise Rp2.5 trillion (around US$285 million) from its IPO.

Last week, the government decided to sell its 39 percent stake in PGN at a price of Rp1,500 each share through IPO.

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 Rp1.30 trillion and the remaining Rp1.2 trillion would go to PGN to help finance its gas pipeline project, deputy for privatization at the Office of State Minister of State Enterprises Mahmuddin Yasin said in Jakarta on Wednesday.

PGN's IPO comes after the successful offering of state-owned PT Bank Rakyat Indonesia, which last month offered 4.76 billion shares, or a 40.5% stake, raising $490 million.

PGN's IPO was open for subscription from December 8-10, and the stock would be listed on the Jakarta and Surabaya stock exchanges on December 15. (*)