Goldman, Morgan in Talks to Buy Indonesian Brokers: Sources

Jakarta Globe, September 12, 2011

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Goldman Sachs and Morgan Stanley are each in talks to buy an Indonesian brokerage firm to expand their reach into the booming capital market of Southeast Asia’s biggest economy, sources said.

Goldman is in talks to buy Tiga Pilar Sekuritas and expects to complete the acquisition before the end of 2011 as it aims to start a local brokerage operation next year, two sources with direct knowledge of the deal told Reuters on Monday.

Goldman does not have an underwriting or broking license in Indonesia, while Morgan Stanley secured an underwriting licence in 2008, but is seeking a bigger presence through a full-fledged broker license.

Both banks plan to add research analysts as well as sales and trading staff to the brokerages next year, while Goldman could also add investment bankers, as they seek to win fees from equity offerings and debt deals, the sources said.

“I think this signals a positive view on our capital market ... It has really become an important destination for global investment banks,” said Winston Sual, who manages nearly $1 billion in funds at Panin Sekuritas in Jakarta.

“This will give more competition for fees among global bankers like JPMorgan and Credit Suisse.”

The banks’ plans in Indonesia, which has seen its stock market hit records this year on surging foreign investment, follow moves by Nomura Holdings and Citigroup to ramp up equity research teams in Jakarta this year to challenge leaders Credit Suisse and Deutsche Bank.

Investment interest in the G20 member is set to rise again next year, when Indonesia hopes to get an upgrade by Fitch Ratings to an investment grade sovereign rating that will put it alongside top emerging BRIC nations such as Brazil. 

Goldman has completed due diligence for Tiga Pilar and both parties are now negotiating the deal structure and valuation, said one of the sources, who all declined to be identified.

“Goldman has already asked Tiga Pilar to start looking for prospective staff and bankers as a precondition before they complete the deal,” said the source. No financial details were immediately available.

Officials at Tiga Pilar and Goldman declined to comment.

The Tiga Pilar deal size is likely to be small as Goldman is only seeking to buy the operating licenses that the deal will provide. It will need to at least inject the Rp 50 billion ($6 million) in license costs and required brokerage capital.

Tiga Pilar, partly owned by the family of Tan Pia Sioe, traded Rp 445 billion by stock value in the first six months of this year, ranking it 102 out of 117 active brokerages, according to stock exchange data.

The IDX composite index has jumped over 5 percent so far this year, topping the list of gainers in Southeast Asia. 

Goldman’s rival Morgan Stanley has also identified a target brokerage firm to acquire and hopes to conduct due diligence this year in order to start operations next year, said three other sources with direct knowledge of this deal.

“Talks are ongoing. It is still early to mid-phase. Morgan Stanley is talking to people,” said one of the sources. Sources declined to give the name of the target brokerage and no financial details were available.

A Morgan Stanley spokesman declined to comment. The talks are aimed at either buying a brokerage to get their seat on the stock exchange or to buy a seat from an existing brokerage, one of the sources said.

A full broking license would allow the firm to cover the secondary side of sales and trading as well as research, the source added.

Citigroup bought Indonesian brokerage Republik last year and this year added bankers and analysts, including veteran analyst Ferry Wong from Macquarie as its new head of research.

Citi was not in the top five for underwriting Indonesian equity deals last year but this year has surged up the league table to rank second among global banks, behind Deutsche.

Reuters

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Russian investment in RI projected to reach US$7 billion

Antara News, Saturday, November 20, 2010 02:48 WIB

Jakarta (ANTARA News) - Russian investment in Indonesia may increase to five to seven billion US dollars in the years to come, Russian ambassador to Indonesia Alexander Ivanov said here on Friday.

He said Russia`s total investment in Indonesia was at present recorded at more than US$1 billion.

"Our investment value in Indonesia has the potential to increase to five to seven billion US dollars," he said.

He said investment cooperation between the two countries in the form of joint ventures had kept increasing from year to year and had even intensified after a recent global financial crisis.

"We must always be optimistic to increase the two countries` cooperation," he said.

He said he would encourage more Russian businessmen to come to Indonesia and conduct partnership with local businessmen.

"For us Indonesia is a market giant which is just growing and one of the emerging countries which is accounted for," he said.

Russia and Indonesia have had diplomatic relations for 60 years. The two countries are common members of the G20, the Asia Pacific Economic Forum (APEC), the UN and Russia has also been the good partner of the Association of Southeast Asian Nations (ASEAN)in which Indonesia is also a member.

"With regard to human resources we hope our cooperation will also increase in student and tourist exchanges," he said.

On the occasion the ambassador had also called on Indonesians not to hesitate to visit Russia which he described as beautiful and friendly.

"I invite more Indonesians to come to Russia that has a lot of beautiful places to visit not only Moscow but also others," he said.

He said it was time for Indonesia as an Asia Pacific neighbour to interact more often with Russia as in the current global era distance has no longer become a problem.

Three New Fertilizer Plants To Cover Domestic Demand

Jakarta Globe, Faisal Maliki Baskoro | November 03, 2010

Jakarta. State-owned fertilizer companies Pupuk Sriwijaya (Pusri) and Pupuk Kaltim (PKT) signed an agreement today to enter into a joint venture with Jordan Phosphate Mines to build three fertilizer factories in Indonesia in a deal worth $900 million.

Arifin Tasrif, president director of state-owned fertilizer company Petrokimia Gresik and chairman of the Indonesian Fertilizer Producers Association (APPI) said the joint venture would fill a gap in a domestic fertilizer market that was expected to demand eight million metric tons per year by 2025.

He said the three factories would each be capable of producing one million metric tons of NPK (nitrogen, phosphorous and potassium) fertilizer each year.

“Once these factories start operating in 2015 it will add three million tons to Pusri’s current capacity of 2.2 million tons, matching fertilizer demand in that year,” Arifin said.

“These factories will also meet the demands of 40 million farmers in Indonesia.”

He said the first factory, planned for Gresik, East Java, was expected to be operational in 30 months, while the other two, to be located in Tanjung Siapi-api, South Sumatra, and Bontang in East Kalimantan, were expected to be completed by 2015.

The Pusri-PKT partnership and Jordan Phosphate will each have a 50 percent stake in the company.

Thirty percent of the venture’s financing would come out of the companies’ equity and the rest from bank loans, Arifin said.

The deal is also a positive development for the fertilizer industry as a whole, which needs $6.2 billion from the private sector to upgrade aging factories, he said.

Mustafa Abubakar, the state enterprises minister, said that with the joint venture, Pusri could become the world’s biggest fertilizer company by 2015.

“We will export some to the Philippines, Malaysia and Vietnam.”

Walid Kurdi, chairman of Jordan Phosphates, said this was the first time his company had entered into a joint venture with a company outside of Jordan.

“We’re comfortable investing here. We trust investing here more than anywhere else as it offers facilities for investors’ protection and it is a potential market,” he said.

Petrokimia Gresik signed a joint venture agreement in January with Jordan Phosphate to build a $200 million fertilizer plant in East Java.

The factory is expected to have a production capacity of 200,000 tons annually.

Jordan Phosphate operates three mines in Jordan, where the government owns 26 percent of the company.

Kamil Holding, an investment company owned by the Brunei Sultanate, has a 37 percent stake.

Ras Al Khaimah Plans $5 Billion Indonesia Venture

Jakarta Globe, Bambang Djanuarto | October 19, 2010

The Argo Gajayana passing through Malang in East Java. Ras Al Khaimah, one of the sheikhdoms of the United Arab Emirates, and Trimex Group plan to invest $5 billion in Indonesian construction projects, including a 130 kilometer railway on Kalimantan. (JG Photo/Afriadi Hikmal)

Jakarta. Ras Al Khaimah, one of the sheikhdoms of the United Arab Emirates, plans to invest $5 billion in Indonesian construction projects as part of a joint venture with Trimex Group.

MEC Holdings, the venture overseeing all of Ras Al Khaimah and Dubai-based Trimex’s Indonesian projects, will spend $1 billion to build 130 kilometers (81 miles) of railway on Indonesia’s part of Borneo island, executive vice chairman Madhu Koneru said on Tuesday. The link will be able to transport as much as 64 million metric tons of coal a year, he said.

“Construction will start in 2012 and we expect to complete the project in 2014,” Koneru said in an interview in Jakarta after meeting Alwi Shihab, Indonesia’s special envoy to the Middle East.

Indonesia, Southeast Asia’s largest economy, is trying to attract investment in infrastructure as President Susilo Bambang Yudhoyono seeks to deliver average growth of 6.6 percent over the remainder of his second and final term ending in 2014.

MEC Holdings will also invest $500 million to develop a coal mine in Muara Wahau, East Kalimantan province, and build a port with an annual capacity up to 34 million tons, Koneru said.

The venture will team up with National Aluminum Co. to build a 500,000-ton aluminum smelter and power plant in East Kalimantan, according to Koneru. That investment may total as much as $3.5 billion, he said.

Bloomberg

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KPPU Says All Clear for Unilever Acquisition

Jakarta Globe | October 14, 2010

Jakarta. The Business Competition Supervisory Commission says it has no objection for Unilever Indonesia Holding BV to acquire Sara Lee Body Care Indonesia after it found no evidence of monopolizing practices.

The commission, also known as the KPPU, began a comprehensive evaluation of the companies’ products on July 9, particularly roll-on deodorants and men’s hair cream, after a preliminary study failed to reach a conclusion.

Under competition regulations, the merged company is not allowed to have more than a 50 percent share of the market for its products.

On Thursday, the KPPU said in an e-mailed statement that its evaluation had found no anticompetitive behavior that would negatively affect consumers because the markets for each product made it difficult to fix prices.

With roll-on deodorants, the proposed merger was found not to impact on other players’ entry into the market.

“Making deodorants does not require highly sophisticated technology, so the barriers to enter the market is relatively low,” the KPPU said.

As for men’s hair cream, the commission said the already saturated market would not allow for one company to dominate the market.

Franky Jamin, general manager at Unilever Indonesia, said the KPPU had never objected to the takeover bid.

In September 2009, Unilever’s parent company announced that it would acquire Sara Lee’s personal care brands in a deal worth $1.9 billion.

The KPPU requires companies to notify it of proposed mergers and acquisitions, or face billions of rupiah in fines.

Tri Polyta Deal to Create Top Chemical Company

Jakarta Globe, Reuters & JG | September 26, 2010

Tri Polyta Indonesia, the country’s No. 1 maker of polypropylene resins, said on Saturday that it would acquire nonlisted petrochemical firm Chandra Asri in a $1.2 billion share swap to form the biggest player in the sector.

The companies are controlled by Indonesian tycoon Prajogo Pangestu through holding company Barito Pacific.

“We expect the deal to be completed by January 1, 2011,” said Tri Polyta’s director, Suryandi.

Polypropylene resin is a lightweight yet durable material used by manufacturers to create fibers and molds.

Barito owns 77.9 percent of Tri Polyta, which is listed on the Indonesia Stock Exchange (IDX), as well as 70 percent of Chandra Asri. Barito will hold a 71.6 percent stake of the combined company after the deal.

Suryandi said Chandra Asri’s shareholders would be issued 2.93 billion in new Tri Polyta stock worth $1.2 billion in exchange for their equity. He declined, however, to give an indicative price for the new shares.

Tri Polyta has appointed Deutsche Bank and Singapore’s DBS Group as advisers for the share swap deal.

Prajogo, a business tycoon who emerged during former President Suharto’s era, lost ownership of the two chemical companies amid the 1997-98 Asian financial crisis, but has since managed to claw back control of the firms.

Tri Polyta in 2009 booked a net profit of Rp 483 billion ($54.1 million), which marked a huge swing back to profitability after posting losses of Rp 13.75 billion the year before.

Shares in Tri Polyta soared 6.6 percent on Friday to close at Rp 3,250.

PT PI II and PP to spend Rp 1.2t on new port

Nani Afrida, The Jakarta Post, Jakarta | Fri, 04/09/2010 7:02 PM

State seaport operator PT Pelabuhan Indonesia (PI) II, in cooperation with state housing developer PT Pembangunan Perumahan (PP), will begin the construction of a new port in Kalibaru, North, Jakarta, in the third quarter.

The port and all necessary supporting infrastructure will require Rp 1.2 trillion (US$133,000,000) in investment, and its construction is expected to conclude next year.

“We are still discussing stake ownership, however PT PI will own the majority of the stake, probably more than 50 percent,” PT PI II president director R.J Lino said in Jakarta on Friday.

PT PP president director Musyanif said that it would only take 20 percent of the total stake ownership in the joint venture, saying it still had many investment plans in other infrastructure sectors such as toll roads and power plants.

Uno May Spend $214 Million Buying Stakes in Consumer Goods Companies

Jakarta Globe, Bambang Djanuarto & Berni Moestafa, February 15, 2010

Indonesia offers “huge potential for companies in the consumer sector," says Sandiaga Uno. (Bloomberg Photo/Dimas Ardian)

Sandiaga Uno, the second-youngest of the nation’s 30 richest people, may invest in consumer companies this year as investors’ interest shifts toward tapping household demand in Asia’s third-most-populous nation.

Uno’s PT Saratoga Investama Sedaya, which manages about $1.5 billion in assets, may spend as much as Rp 2 trillion ($214 million) to buy stakes in consumer companies, he said.

Jakarta-based Saratoga is looking at opportunities in the retail, food and beverage, and pharmaceutical industries among others, Uno said.

The private-equity firm is betting on domestic consumption in Southeast Asia’s biggest economy to boost returns. The country avoided following its neighbors into a recession after nine rate cuts by the central bank bolstered consumer spending, which accounts for about two-thirds of gross domestic product. Fourth-quarter growth was the fastest in a year at 5.4 percent.

“The demographic type of investment that relies on strong sales because of the population and the rise in the middle class has become the new theme of investment,” said Uno, 40, whose fortune is estimated at $400 million. Indonesia offers “huge potential for companies in the consumer sector.”

Growth in Indonesia’s $514 billion economy has been supported by rising consumer confidence, which according to a central bank index rose in January to near the five-year high recorded in July when President Susilo Bambang Yudhoyono was elected to a second term.

Retail-sales growth in Indonesia increased to 33.9 percent in November, the fastest pace in two years. PT Matahari Putra Prima, the country’s biggest retailer, last month sold its stake in a department-store unit for Rp 7.2 trillion, or double the unit’s share price before the deal was announced.

“We’re seriously looking into which pockets of industries still offer reasonable valuations,” Uno said. “We expect to complete an acquisition this year.”

Still, a possible increase in interest rates and under developed infrastructure may hamper investments, Uno said. Bank Indonesia on Feb. 4 kept its key interest rate at a record low of 6.5 percent for a sixth straight month to support consumer spending.

Inflation increased to 3.72 percent in January, the highest in seven months. The central bank may need to “take monetary policy action” if inflation approaches or exceeds 6 percent, Bank Indonesia Deputy Governor Hartadi Sarwono said last week.

Saratoga owns 23.15 percent of PT Adaro Energy, Indonesia’s second-biggest coal producer. The company also has investments in telecommunications and palm-oil businesses.

While Saratoga remains “bullish on coal,” finding new investment opportunities in energy-related industries has been difficult because competition among buyers has driven up the valuations of these assets, Uno said. PT Benakat Petroleum Energy said on Thursday that it signed a deal this month to buy a 37.15 percent stake in oil-services provider PT Elnusa, beating Uno’s Saratoga.

The private-equity firm plans to meet investors on a road show at the end of this year or early 2011 to raise $300 million as more foreign investors express interest in Indonesia, Uno said.

“They’re suddenly starting to look at Indonesia because the growth story is there, the political and economic stability is there,” he said.

Bloomberg

Pertamina seeks help for LNG terminal

Upstreamonline.com, News wires Friday, 29 January, 2010, 07:28 GMT

Speaking out: Pertamina's president director Karen Agustiawan

Indonesia's state oil and gas company Pertamina is seeking a partner for a planned liquefied natural gas receiving terminal.

Pertamina said previously it planned to build a floating LNG receiving terminal in East Java, to be completed in September 2011.

"We need a ship which we will modify to become a floating LNG receiving terminal. We don't want to lease the ship but we want to own it," Pertamina's president director Karen Agustiawan told reporters today.

"Therefore, we will ask the ship owner to participate in the terminal project. Under the joint venture, Pertamina wants to be the majority shareholder in the project," she said.

She said Pertamina will talk with Bontang LNG plant, Tangguh plant, and also Qatar, as it seeks LNG supplies for the terminal project.

"Our terminal in East Java will have a capacity of between 1.5 million tonnes to 2 million tonnes per year. We will need LNG from every source, both domestic or abroad," Agustiawan said.

Pertamina already plans to build a floating LNG receiving terminal near the capital Jakarta together with local gas distribution company Perusahaan Gas Negara (PGN).

PGN also plans to build an LNG receiving terminal in North Sumatra with a capacity of about 1.5 million tonnes per year.

Indonesia has no LNG receiving terminal currently. The world's third-largest LNG exporter behind Qatar and Malaysia is seeking non-oil energy sources such as natural gas and coal to meet rising domestic demand for power and to reduce consumption of crude oil as its reserves dwindle.

The Tangguh plant, operated by BP's Indonesian unit, has capacity to produce 7.6 million tonnes per year of LNG via two trains.

Indonesia has far more gas than oil but has limited supplies for its own use due to long-term LNG export commitments, which it is reviewing, reported Reuters.

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CVC’s Venture Pays $771 Million to Acquire Matahari Store Unit

Bloomberg, by Widya Utami and Achmad Sukarsono

Jan. 25 (Bloomberg) -- Meadow Asia Company Ltd., a unit of U.K. buyout firm CVC Capital Partners Ltd., paid 7.2 trillion rupiah ($771 million) to buy the department store unit of PT Matahari Putra Prima, Indonesia’s biggest retailer.

Jakarta-based Matahari Putra sold its 90.76 percent stake in PT Matahari Department Store to Meadow, a venture it established with CVC Capital, Benjamin Mailool, president director of Matahari Putra, told reporters in Jakarta today.

Matahari Putra’s shares jumped 10.9 percent to 1,120 rupiah in Jakarta today, the biggest increase in almost two years. The retailer plans to buy a 20 percent stake in Meadow, with an option to purchase an additional 10 percent, Mailool said.

This transaction is “proof of foreign investor interest in Indonesian companies,” said Edwin Sinaga, president director of PT FinanCorpindo Nusa, a Jakarta-based brokerage firm. “The share surged as people expect a tender offer.”

Meadow will also buy another 7.24 percent stake in Matahari Department Store from shareholders, Matahari Putra said in a filing today on the Indonesia Stock Exchange. The agreement was signed on Jan. 23, the statement said.

Matahari Department’s shares surged 24 percent to 1,680 rupiah.

To contact the reporter on this story: Widya Utami in Jakarta at wutami@bloomberg.net; Achmad Sukarsono in Jakarta at asukarsono@bloomberg.net

Wika to set up joint venture to tap foreign markets

Antara News, Monday, January 18, 2010 21:44 WIB

Jakarta (ANTARA News) - PT Wijaya Karya Tbk (Wika) plans to set up a joint venture company to tap construction market abroad particularly in Northern African countries such as Algeria, the company`s finance general manager, Entus Asnawi, said.

"Like in Algeria we will set up a joint venture with a local company to tap construction market in the oil rich country," Entus said here on Monday.

Wika would inject up to 49 percent of capital into the joint venture company with the rest of the capital left for the local company, he said to newsmen.

"We deliberately take a minority position because the rule in the country only allows to hold up to 49 percent shares," he said.

He said Wika would set up the company to win construction projects in that country which number a lot including building, housing and bridge construction projects.

"Later after the company wins a tender will Wika come to carry out the project. We are optimistic we will win the projects because the number of construction companies in that country is small," he said.

Entus said the plan will be realized immediately by the middle of this year at the latest and a local has already been chosen to be Wika`s partner.

He said Wika has actually received a lot of offers so far to carry out projects abroad such as from Russia and Brazil but "study has yet to be carefully done with regard to legal aspects to avoid a loss."

Entus said Wika had indeed built cooperation with Exim Bank of Indonesia to become the underwriter for the overseas projects but the bank also had to conduct a careful study first before agreeing the plan.

Regarding Algeria, he said, Wika was now carrying out a 500 kilometer long road and bridge project worth Rp800 billion in cooperation with a Japanese consortium.

"We win the trust because the result satisfied the consortium. Although our posisition is a mere sub-contractor we have been trusted to implement the next package. So we have twice obtained additional packages," he said.

With regard to the Asean-China Free Trade Area he said Wika would change its strategy not only to become a mere sub-contractor but to become a main contractor.

KS, Posco join hands to build largest steel mill

The Jakarta Post, Jakarta | Wed, 12/02/2009 9:22 PM

PT Krakatau Steel, Indonesia’s largest steel maker, and South Korea’s giant Posco may start in August the construction of an integrated US$6 billion steel mill capable of producing 6 million tons — the country’s largest.

By 2013, when the construction of the mill to be located in Banten’s Cilegon is scheduled for completion, the country would be able to cut steel imports by at least 20 percent, Krakatau Steel president director Fazwar Bujang said on Wednesday.

Fazwar was speaking to reporters following Wednesday’s signing of a Memorandum of Agreement (MoA) with Posco, or Pohang Iron and Steel Corporation, on a joint venture to establish the mill.

“Of the total $6 billion, Posco will fund 70 percent and Krakatau Steel 30 percent. But in the end, we will have 45 percent of the shares, while Posco will have 55 percent,” he said, adding that Krakatau Steel’s share of funding for the investment would come from the company’s equity and bank loans.

South Korean ambassador to Indonesia, Ho Young Kim, who attended the signing, said that Posco’s investment in the joint venture was the biggest single investment among South Korean companies. (adh)

Asian investors interested in buying former Bank Century

Antara News, Friday, November 27, 2009 02:52 WIB

Jakarta (ANTARA News) - Firdaus Djaelani, chief executive of the Deposit Insurance Agency (LPS), said several investors from Asia were seriously considering to buy Bank Mutiara or former Bank Century.

"Several of them have shown serious interest and have come three times to enquire about Bank Mutiara," he said at a press conference.

LPS became Bank Mutiara`s sole majority shareholder after the agency provided the funds needed to prevent ailing Bank Century from collapsing. After the bailout, the bank was renamed Bank Mutiara.

However, Firdaus said, none of the interested investors had so far filed a letter of intent. "They are still talking. But I am optimistic the bank can be sold," he said.

The government has given LPS three years` time and the possibility of extending the period by another two years to sell the bank to recoup the bailout funds totalling Rp6.7 trillion.

"We will sell it for Rp6.7 trillion within five years but if we fail we will sell it for the best possible price," he said.

The president director of Bank Mutiara, Maryono, said he also believed the bank could be sold at the targeted price.

He assumed the bank`s net price would reach an average Rp250 billion per year and so, within five years, a total of Rp1.250 trillion would have been collected. "Since the LPS took it over, the bank`s net profit will not be spent on dividends," he said.

With the value of the bank`s assets recorded at around Rp500 billion based on four times their book value, Rp7 trillion would be a reasonable selling price for the bank, he said.

Some 99.996 percent of the bank`s shares are now held by the LPS with the rest or 0.004 percent belonging to the public and private parties.

"However, if the bank is sold to the holders of 0.004 percent of the shares, they cannot enjoy the proceeds. This is because the bank`s equity was negative when LPS took it over," he said.

Indonesian unit of Australia`s Clough signs US$250 mln coal mining deal

Perth (ANTARA News/Asia Pulse) - Clough Ltd's (ASX:CLO) Indonesian subsidiary has signed a US$250 million (A$376.9 million) five-year contract to mine the Santan Batubara coal project in East Kalimantan. 

The concession is owned by PT Santan Batubara, an equal joint venture between Clough's 82 per cent owned Indonesian subsidiary, PT Petrosea (JSX: PTRO), and PT Harum Energy Indonesia. 

Clough, an engineering, procurement and construction services group, said the contract was for overburden removal, coal recovery and loading at PT Santan's Separi mine site in East Kalimantan.

Bapepam to revise IPO rules to protect companies

Ika Krismantari, The Jakarta Post, Jakarta | Sat, 01/03/2009 10:33 AM  

The Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) plans revision of the regulations on its initial public offering (IPO) scheme to ensure that firms wanting to go public are better protected from negative impacts of the global economic downturn. 

The revised regulation is expected to be issued in the first quarter of 2009, Bapepam chairman Fuad Rachmany said recently. 

Under the proposed regulation, companies planning to offer their shares to the public for the first time will be given a period of three months after securing Bapepam's approval to implement their plan. 

This is aimed at providing more time for reviewing the feasibility of their IPO, and to give time for reassurance that market conditions would be favorable for generating the expected proceeds despite the uncertainties in the global equity market. 

"We don't want that the market fails to absorb the shares due to unfavorable market conditions once the companies execute their plan for the IPO," Fuad said. 

Under the existing regulation, companies holding Bappepam's IPO approval are required to offer their shares to the public as soon as possible. 

The proposed regulation is a response to the October stock market collapse, in which several companies had to unexpectedly drop their IPO plans over concerns that the sales of their shares could not be fully absorbed by investors. 

While targeting some 25 companies to go public last year, the Indonesia Stock Exchange (IDX) only completed IPO procedures for 19 of them by the end of 2008. 

IDX president director Erry Firmansyah said earlier that 15 companies were planning to launch an IPO during 2009, with 11 of them already in the pipeline, including integrated oil and gas service provider PT Prime Petroservices and telecommunication network service provider PT Power Telecom. 

The stock market has yet to become a fully alternative financing option for the corporate sector in Indonesia, as the role of the banking sector is still considered predominant. 

Around 70 percent of funding for the corporate sector is still therefore being supplied by the banks, with the rest coming from the stock market and bonds. 

The revised IPO regulation will also require firms to get approval from the Bapepam before issuing a full public disclosure on their IPO plan, known also as the prospectus. 

The watchdog will examine the prospectus for any legal and future problems which may potentially cause losses to investors. 

Under the existing regulation, companies can distribute their prospectus to Bapepam and the public at the same time. 

"We don't want a case like PT Adaro Energy to reoccur, in which the public (has) already read the prospectus while Bapepam is still checking it, creating pressures on us later to grant the IPO approval," Fuad said. 

Bapepam drew criticism from analysts over its decision to give approval for the Adaro IPO, which was made in July last year. 

Although the IPO was a success for Adaro, gaining proceeds of Rp 12.3 trillion (US$1.08 billion), some investors thought the company did not merit the permit as it was still involved in a number of unresolved legal disputes. 

Bapepam will also shorten the selling period from a minimum of five days to only one day to make the IPO process more effective and efficient.

PTC plans JV with Singapore's Asian Infratech for coal asset buys abroad

1 Jan 2009, 0318 hrs IST, Subhash Narayan & Dheeraj Tiwari, Economic Times India 

NEW DELHI: PTC India, the country’s largest electricity trading company, is diversifying into coal and looking for coal mines to buy abroad. It will set up a joint venture with Singapore-based firm Asian Infratech for identifying and acquiring companies overseas. 

“The new company will be a 50:50 joint venture between PTC and Asian Infratech. We’ll be bidding for acquiring entire operations of coal mines on sale and also look at picking up minority stake in coal and power companies. It is yet to be decided whether PTC will directly invest in the new company or through PTC Energy, our arm looking into asset-based business,” said a senior PTC official, who did not wish to be quoted. 

The two companies recently signed a memorandum of understanding (MoU). The new joint venture company has already identified some coal mines in Indonesia and plans to bid for them. 

PTC aims to bring almost 15 million tonnes of coal to India through this route, which is enough to generate 5,000 mw power. Asian Infratech is a subsidiary of Singapore-based Asian Infrastructure, which invests in power-generation assets and services business. 

PTC will use a substantial portion of the Rs 1,200-crore it raised in 2008 for investing in the JV. The company may be started with an initial capital of Rs 600 crore, with Rs 300 crore contributed by PTC. The PTC official, however, could not confirm this. The investment would be finalised before the two companies sign the joint venture agreement within the next few weeks. 

Indonesia, Singapore and other Southeast Asian countries are ideally suited for routing coal back to India due to lower freight costs. The new company would also supply coal to local players in these countries and bid for power projects there. 

India’s galloping demand for power has made it important to secure fuel supplies. Already, Tata Power, NTPC, Coal India, Reliance Power, Lanco Infratech and GVK Power either plan to or have picked up equity in coal assets abroad, especially in Indonesia. 

The government has also set up International Coal Ventures (ICVL), a joint venture of five large public sector undertakings, for scouting coal assets abroad. Apart from overseas operations, PTC is also in talks with Goldman Sachs, Macquarie and Blackstone, among other global players to set up $1-billion offshore fund for providing equity support to power projects.

Bakrie seals deal with Northstar on joint venture

The Jakarta Post | Thu, 12/25/2008 7:28 PM  

PT Bakrie and Brothers announced Thursday it had reached agreement on all terms for a strategic partnership with Northstar Pacific, setting up a 70:30 joint venture company. 

Under the deal, the joint venture, whose name has not been disclosed, would own 21.4 percent of shares in the world's largest producer of coal to fuel power plants, PT Bumi Resources. 

"The most important benefit for Bakrie is we have not only executed this agreement with Northstar but solved the outstanding debt problem as well. This was following the global economic downturn at the end of September 2008, which unfairly affected the share price in our group of companies," said president director Nalinkant A. Rathod in a statement. 

The deal with Northstar will also affect Bakrie's shareholdings in its four subsidiaries. According to Rathod's statement Bakrie's ownership would be as follows: 42.6 percent share in PT Bakrie Sumatra Plantations, 48.3 percent in PT Bakrie Telecom Tbk, 14.8 percent in PT Bakrieland Development and 43.2 percent PT Energi Mega Persada. All companies are publicly listed. 

"The agreement has been reached against the backdrop of a closer and long-term strategic relationship between Bakrie and Northstar," Nalinkant added. 

Both parties are committed to finalizing the transaction as soon as possible, he said. (and)

Nalco, UAE co JV for smelter in Indonesia

DNA India, Nandini Goswami, Saturday, December 20, 2008  01:14 IST                      

KOLKATA: National Aluminum Co (Nalco) has entered into a joint venture agreement with United Arab Emirates government linked RAK Minerals and Metals Investment for setting up a 5 lakh tonne smelter in Indonesia at a project cost of around $4 billion. The venture is likely to have Nalco as majority partner with around 75% stake. 

“This company is almost like a local company, which will be involved in construction of railways and ports in Indonesia on a built, own, operate basis. We are in the process of tying up other logistics on the coal front. The smelter, which will be set up in Sumatra is likely to start production in a year and a half’s time,” sources told DNA Money. 

“Some other approvals are also expected along with technical issues that have to be cleared. The entire project would include a 1,250 mw power plant as well,” the source said. DNA Money had reported on November 13 that Nalco was tying up its logistics in Indonesia and had earmarked a land in the south Sumatra province after exploring 2-3 sites for its project viability and had almost frozen its joint venture partner. 

The company would provide a detailed project report following clearance of various issues and the project could take off by early 2010. Nalco is also actively pursuing setting up a gas-based 3.1 lakh tonne smelter in Iran. A 750 mw power plant would be set up as well along with the smelter. “In Iran we would again go in for a joint venture with an Iranian company, which cannot be divulged now,” he added. 

Meanwhile the aluminum major has put its plans in South Africa and Saudi Arabia, the other proposed projects on the backburner. Back home, the company is awaiting the clearance for allotment of water for its proposed 5 lakh smelter in Jharsuguda in western Orissa, following which it will proceed on the land front. 

Nalco has ambitious plans to invest Rs 40,000 crore in greenfield projects in India and abroad.

Related Article:

Nalco Raises Estimate for Sumatra Plant to $4 Billion

$4bn Tanjung Aluminum Project Planned

Pertamina seeks 30 percent stake at Inpex gas field

Fri Dec 19, 2008 7:34am GMT  

JAKARTA, Dec 19 (Reuters) - Indonesian state oil firm Pertamina is seeking a 30 percent participating stake at a gas field operated by Japan's Inpex (1605.T: Quote, Profile, Research), a senior company official said on Friday. 

Pertamina wants to expand its upstream activities and is looking at several potential gas fields in the country, including Inpex's field in the Timor Sea, to boost its gas reserves and production. 

"We have sent a letter to Inpex for the gas field...if we get 30 percent is better," Ari Soemarno, Pertamina's president director, told reporters. 

"Pertamina is ready to prepare financing for that field if it's involved," he added. 

Previously, Pertamina's upstream director Karen Agustiawan had said Pertamina is looking at a 10 percent stake in the Inpex field, which has not yet produced any gas. 

Inpex Holding Inc is currently the sole operator of the Abadi gas field in the Masela block in eastern Indonesia. 

The field is estimated to have more than 10 trillion cubic feet of natural gas reserves. 

If confirmed, that would make the project the second-biggest new gas field after the Tangguh project in Papua, which has combined reserves of 14.4 tcf. 

Pertamina already has several gas fields in Indonesia, including in South Sumatra, which supplies gas-fired power plants in Jakarta via pipeline. 

Indonesia, which has far more gas than oil, has pushed companies to move faster in developing gas projects as the country badly needs the fuel for domestic industries and exports. Indonesia, the world's number-three LNG exporter after Qatar and Malaysia, is increasing its use of energy sources such as natural gas to reduce oil use because of high prices and dwindling domestic supply. 

(Reporting by Muklis Ali, Editing by Michael Urquhart)

India`s ICVL eying stake in 10 overseas coal miners

New Delhi (ANTARA News/Asia Pulse) - International Coal Ventures Ltd (ICVL), a special purpose vehicle formed by leading PSUs SAIL (BSE:500113), RINL, NMDC (BSE:526371), NTPC (BSE:532555) and CIL to scout coal properties abroad, is keen to pick up stakes in nearly 10 mining firms in Australia, Canada, Indonesia and Africa. 

Of 10 miners being eyed by ICVL, six have coking coal properties while the rest run thermal coal mines. 

According to a senior official in the Steel Ministry, ICVL not only plans to pick up minority and majority stakes in the overseas mining companies, but is also exploring the option of entering into JVs for developing the coal properties.