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INITIAL PUBLIC OFFERING (IPO) - JAKARTA. Barito Group company, PT Barito Renewables Energy, which operates in the field of new renewable energy (EBT), plans to conduct an initial public offering (IPO). The company, which will use the stock code BREN, will release a maximum of Rp 4.5 billion shares or equivalent to 3.35% of the paid-up and placed capital after the IPO.
The price offered in this initial public offering ranges from Rp 670 to Rp 780. Samuel Sekuritas Indonesia analyst Muhammad Farras Farhan considers the valuation of BREN shares to be moderate.
With the range of bookbuilding prices, the BREN valuation range is at 14.3 times to 16.1 times EV/EBITDA 2023, assuming an annual EBITDA of US$ 535 million.
Farras considers this valuation range to be 4% higher than the global and regional average. This valuation is also 14% more premium compared to its closest competitor, PT Pertamina Geothermal Energy Tbk (PGEO), which has already listed on the IDX.
However, BREN is considered to have solid financial performance. With a large operational capacity, BREN has managed to record strong and stable financial performance. BREN currently has several long-term sales contracts with a period of up to 40 years.
This subsidiary of PT Barito Pacific Tbk (BRPT) recorded revenue of US$ 147.1 million in the first quarter of 2023, up 10% year-on-year (YoY) with an EBITDA margin of 90.9%.
In the future, BREN will focus on optimizing existing geothermal capacity while adding new capacity, including an addition of 15 megawatts (MW) in the Salak geothermal work area using binary technology at the end of 2023 and 23 MW at Wayang Windu Unit 3 in 2026.
In addition to increasing the capacity of existing geothermal work areas, BREN is also finalizing plans to open 3 new geothermal work areas.
In the first quarter of 2023, BREN produced 1,294 gigawatt hours (GWh) of electricity and 481 GWh of steam from three geothermal work areas, each with an installed capacity exceeding 200 megawatts (MW). Thus, the total installed capacity of BREN is 885 MW.
With such capacity, BREN is not only the largest geothermal operator in Indonesia, but also one of the largest geothermal players in the world.
In addition to its large capacity, BREN has also proven its operational excellence, with all of its power generation units operating at a capacity of more than 90% in the first half of 2023.
Barito Renewables Energy has the potential to raise a maximum of Rp 3.51 trillion from the IPO.
Quoting the prospectus, all funds obtained from the initial public offering will be used by BREN to contribute capital to STAR by taking part in the new shares to be issued by Star Energy Group Holdings (STAR).
All funds that have been deposited as capital contributions from BREN will be used by STAR for two purposes.
First, to pay part of the B facility debt to Bangkok Bank Public Company Limited (Bangkok Bank) as much as US$ 158.58 million.
Second, to fulfill payment obligations to Star Energy Oil and Gas Pte. Ltd. and BREN as the implementation of the appointment and cost replacement agreement signed by BREN, Star Energy Group Holdings and Star Energy Oil and Gas dated July 3, 2023 and BREN's letter dated August 25, 2023, regarding the appointment of Star Energy Group Holdings as the shareholder of ACEHI Netherlands B.V.
The details of the payment obligations based on the appointment and cost replacement agreement are the payment obligations to Star Energy Oil and Gas as much as US$ 66.5 million.
Then, the obligation to return the advance to BREN is US$ 6 million.
The funds obtained by BREN from the fulfillment of obligations by Star Energy Group Holdings will be used by BREN for working capital including but not limited to salary payments, professional service fees and rental fees.
