PGN uncertain about IPO, bond-offering schedule

State gas distribution firm PGN said Tuesday it had yet received firm director from the ministry of state owned enterprises regarding plan to go public.

?Initial plan was to launch IPO by the fourth quarter of this year, but, thus far there?s not order from the ministry. Maybe the ministry waits until market condition improves,? said president WMP Simanjuntak. Simanjuntak said PGN planned to float maximum of 20 percent of its shares.

He also said the company currently did not prioritize bond issue as now the company has no project that needs bond financing. Earlier PGN planned to issue the bond to anticipate funding shortage for its S. Sumatra-West Java gas pipeline, but Japan Bank for International Cooperation (JBIC) had agreed to finance 85 percent of the US$ 500 million project.

Simanjuntak said PGN will also need further US$ 200 million fund to finance construction of 200-km Grissik-Pagar Dewa and Balaraja-Jakarta pipeline grid as part of South Sumatra-West Java pipeline extension, but said PGN had request JBIC to also finance the project. ?We ask JBIC to provide us yen denominated loan with interest of 1.8 percent per annum. So, right now we don?t see any immediate need to launch bond offering,? he said.

In 2003, Simanjuntak said PGN booked net earnings of Rp. 970 billion (US$ = Rp. 8,800), far higher from previous years net earnings of Rp.317 billion. He said the increase in net earnings was more than 60 percent contributed by gain from the sale of PGN?s 40 percent stake in Transgasindo last year. (alex)