Indonesia’s Geo Energy prices IPO at 32.5¢ a share

Indonesian coal-mining company Geo Energy Group is heading for a Singapore Exchange (SGX) mainboard listing with an initial public offering of 289.26 million shares at 32.5 cents each.

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Guanyu said…
Indonesia’s Geo Energy prices IPO at 32.5¢ a share

Andrea Soh
16 October 2012

Indonesian coal-mining company Geo Energy Group is heading for a Singapore Exchange (SGX) mainboard listing with an initial public offering of 289.26 million shares at 32.5 cents each.

The invitation shares comprise about 258.35 million new shares and 30.91 million vendor shares. Three million shares are public-offer shares and the remaining 286.26 million are for placement.

The group, which started business operations in 2008, previously operated coal mining sites owned by third parties, with its activities ranging from production planning and land clearing to coal excavation and sales.

With a new Indonesian mining law introduced at the end of 2009 that disallowed mine contractors from excavating and selling coal, the group acquired its own mining concession last year, and moved into providing mine contracting services such as overburden removal and coal hauling when it won its first contract in February this year.

It has so far produced about 445,000 tonnes of coal from its own mining concession, the group said.

It estimates that it will produce about 700,000 tonnes of coal for the full year, and this will be ramped up to 2.3 million tonnes next year, its chief financial officer Tan Cheang Shiong told BT.

The average calorific value of its coal is above 3,400 kcal per kg.

The 4,570 hectare concession at Kutai Barat regency in East Kalimantan, Indonesia, has 4.2 million tonnes of proven reserves and 8.3 million tonnes of probable reserves, its prospectus indicated.

Geo Energy lodged its final prospectus with the Monetary Authority of Singapore last Wednesday.

The overall take-up for the shares among institutional investors has been healthy so far, said Robert Lim, managing director of Ellis Botsworth Advisory, which is advising Geo Energy on the IPO.

Share application for retail investors closes at noon tomorrow. Trading of shares is scheduled to start on Friday.

The IPO’s joint underwriters and placement agents are Canaccord Genuity and UOB-Kay Hian.

The new shares are expected to raise about $77.8 million in net proceeds, which will be used mainly to acquire new mining equipment and machinery, and for general working capital purposes, the group said in its prospectus. Part of it will also go to acquisitions, joint ventures and strategic alliances, as well as to build a jetty and barge loading facilities five kilometres from its concession.

The group currently sells to coal traders in Indonesia, but hopes to raise its profile among international buyers through its Singapore listing.

There are also plans to set up a coal marketing arm in Singapore next year. The group already has its finance team based here.

For the year ended Dec 31, 2011, Geo Energy Group earned revenues of US$69.25 million, up US$19.19 million from the previous year.

Profit attributable to the owners of the company worked out to US$14.32 million, compared with US$11.1 million the year before.

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