Adaro May Seek $600 Million in Record Indonesia IPO

By Leony Aurora and Wahyudi Soeriaatmadja

July 2 (Bloomberg) -- PT Adaro Indonesia, the nation's second-largest coal producer, plans to sell shares in what would be the country's biggest initial public offering.

Adaro may raise as much as $600 million selling between 20 percent and 30 percent of existing and new shares this year, said three people with knowledge of the plan. The proceeds will be used to pay debt, said the people, who declined to be identified because an announcement on the sale is pending.

Coal prices have surged after China, the biggest consumer of the fuel, cut exports and India sought more shipments to fire power stations. The Jakarta Mining Index, which tracks Indonesia's 10 mining companies, has surged 77 percent this year, more than four times the 18 percent gain of the broader Jakarta Composite index.

The IPO would help Adaro ``expand their volume aggressively and take advantage of the coal price increase,'' said Sebastian Tobing, an analyst at PT Trimegah Securities in Jakarta. ``Coal is a booming sector. The IPO would be attractive.''