PGN will sell 30% of its shares in forthcoming IPO

State owned gas distribution company PT Perusahaan Gas Negara (PGN) would sell 30 percent of its shares during the company?s initial public offering (IPO) later this year, Kompas reported on Saturday.

The company said that 20 percent shares of the 30 percent share would comprise old shares while the other 10 percent would be in the form of new shares. The proceeds from the sale of the 20 percent share would go to the government?s coffer while those from the other 10 percent will be used to strengthen the company?s capital structure.

The company hopes that the IPO would be able to strengthen its capital structure so that its debt to equity ratio could be improved to 70 percent against 30 percent.

PGN said the IPO, which would be formally registered at the Capital Market Supervisory Agency (Bapepam) on Sept. 16, would reduce the government?s ownership to 71.2 percent. The investing public will hold the other 27.2 percent. (*)