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Friday, October 7, 2011

Indonesian Miner Plans $167m IPO to Fuel Sumatra Coal Boom

Fri,October 07, 2011
By Francezka Nangoy

Coal miner Atlas Resources aims to raise as much as Rp 1.5 trillion ($167 million) in an initial public offering to help finance its expansion plans.

The company plans to sell 783 million shares, or about 25 percent of its equity, according to Atlas’s underwriter, Indo Premier Securities. The shares will be offered at Rp 1,500 to Rp 1,900 per share to generate Rp 1.17 trillion to Rp 1.49 trillion.

Indo Premier managing director Moleonoto said Atlas would allow an over-allotment of up to 117.5 million shares if there is an oversubscription.

Atlas corporate secretary Aulia Setiadi an said on Friday that most of the proceeds will be used to build supporting infrastructure in its Sumatra coal mining hubs in Muba and Oku. Atlas also operates mining centers at Berau and Kubar in Kalimantan and in Papua.

The company is focusing on its Muba hub because it is the largest facility, with capacity set to reach 5.1 million tons a year by 2013. Atlas will invest $106 million on infrastructure there, Aulia said.

The company is currently waiting for an exploration permit for Papua, but output at the three other hubs is expected to reach 9.3 million tons in 2013.

Atlas’s current total capacity is about 2.5 million tons. In the first four months of this year the company’s total production was 400,000 tons. It produced 1.3 million tons in 2010.

Aulia said that as well as receiving funds from the IPO, the expansion will draw on the company’s internal cash flow and bank loans.

Abdi Andre, Atlas’s president director, said in a statement that about $25 million of the IPO funds will go to compensation for the restructuring of the company’s supply contract with Hong Kong-based Noble Group Limited, with the aim of starting a new marketing and sales contract.

Another 27.5 percent of the proceeds will be set aside for acquisitions in new fields should an “opportunity arise,” Abdi said. Atlas has no current plans to acquire another company, he said.

Indo Premier’s Moleonoto, said that despite the volatile market, he was confident the share sales would be successful.

“We are optimistic because Atlas has an interesting investment scheme and growth prospects,” Moleonoto said.

Book building and an international roadshow will be held from Oct. 10-18. Atlas expects to carry out the IPO from Oct. 31 to Nov. 2 and list on the Indonesia Stock Exchange on Nov. 8.

In the first half of 2011, Atlas booked Rp 402 billion in revenue, up 47 percent on the same period last year. Profit zoomed to Rp 46 billion in the year’s first half, up from Rp 2.5 billion in the same period last year.

The listing underlies the boom in the nation’s coal mines, which have been in high demand recently.

(sourced TheJakartaglobe)

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