13 July 2012

TOBAs debut gets warm welcome

PT Toba Bara Sejahtra, the coal mining unit of Toba Sejahtra Group controlled by former army general Luhut Pandjaitan, performed well in its initial stock trading Friday although the benchmark Jakarta Composite Index (JCI) continued to drop for the second day. 

Shares in Toba Bara (TOBA) were opened at Rp 1,920 (US 20 cents), a slight 1 percent increase compared to its initial public offering (IPO) price of Rp 1,900. The shares kept rising and touched the highest level of the day of Rp 2,200 shortly after the opening sessions.

The shares ended at Rp 2,125 a 11 percent surge from its IPO price. 

Meanwhile, the JCI closed 0.36 percent lower at 4,055.2 compared to Thursday’s closed at 4,069.84, marking the second day of a consecutive losing streak after it regained its psychological a level above 4,000 on Tuesday. 

Toba Bara, the eighth company listed on the IDX this year, offloaded 210.68 million shares, or 10.5 percent of its enlarged capital. The number of shares released was reduced from previous planned 15 percent amid the bearish condition on the market as the result of the European financial crisis. 

 “We have seen strong demand. However, the problem was whether our shareholders allow us to sell shares at Rp 1,900,” finance director Pandu Sjahrir said.

The shares were sold at the lower end of Toba Bara’s price range of Rp 1,850 to Rp 2,400 during the public offering. During the IPO, Toba Bara’s shares were oversubscribed by 13.5 times.

Toba Bara president commissioner Luhut Pandjaitan said that the company might sell more shares in the near future as the company’s IPO proceeds were lower than expected because the cut in the IPO size.

 “There is possibility to perform private placement, perhaps next year, when our valuation gets bigger. There will be strategic investors, which can be our anchor investors bidding for higher prices during IPO,” said Luhut, a former Indonesian ambassador and former Industry and Trade minister. 

According to Pandu, several anchor investors bought Toba Bara’s shares during the IPO. The biggest investor, he said, was Barings Private Equity Asia.

Toba Bara pocketed Rp 400.29 billion, lower than the previously planned of up to Rp 763 billion. 

The company will use around Rp 210 billion, or 52.5 percent of funds from the IPO, to finance working capital. About 26.1 percent or Rp 104 billion to pay loans to BNP Paribas and the remaining 21.4 percent will be used to finance exploration or acquisition. 

“We always look at possibilities to acquire other mining companies. However, we will always focus on sites around our existing areas,” Pandu said.

Toba Bara currently has three subsidiaries; PT Adimitra Baratama Nusantara (51 percent), PT Indomining (100 percent) and PT Trisensa Mineral Utama (100 percent). The three subsidiaries have concession areas in East Kalimantan. 

Adimitra has 2,990 hectares concession with estimated coal resources of 156 million metric tons, Indomining has 683 hectares areas with estimated coal resources of 37 million metric tons and Trisensa has 3,414 hectares concession with estimated resources of 43 million metric tons.

Pandu said that at least 10 companies hold mining concessions around areas of owned by Toba Bara’s subsidiaries.

“Now, we are in discussions with three or four companies. They have meaningful coal reserves of above 10 million or 20 million metric tons,” he said, adding that the companies’ coal calorie was similar with its subsidiary Trisensa’s of 4,700 gross caloric value (GAR).

Toba Bara is expecting to produce 7.6 million metric tons of coal this year, up about 46 percent from last year’s 5.2 million metric tons.

“That number is conservative because our infrastructure can accommodate up to 14 million metric tons when we reached production of 12.1 million metric tons in 2014,” president director Justarina Naiborhu said.