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INITIAL PUBLIC OFFERING (IPO) - SINGAPORE. Indonesian state-owned fertiliser company PT Pupuk Kalimantan Timur is planning an initial public offering (IPO) in Jakarta this year that could raise about $500 million, two sources with direct knowledge of the matter said.
At least two banks have been tapped for the deal which will see Pupuk Kalimantan Timur's parent PT Pupuk Indonesia selling up to a 20% stake in the company, the sources told Reuters.
Pupuk Indonesia, a national company with businesses ranging from food to logistics, owns 99.99% of Pupuk Kalimantan Timur, which is also known as Pupuk Kaltim, according to its website.
IPO proceeds will be used for capacity expansion, said one of the sources. Both sources declined to be named as the matter is private.
Pupuk Kaltim and Pupuk Indonesia did not respond to requests for comment.
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The planned listing comes as Indonesia, Southeast Asia's largest economy, is targeting to raise 170 trillion rupiah ($10.89 billion) in its capital markets this year, including listings and debt instruments.
Indonesia's capital market raised about 260 trillion rupiah last year, according to Inarno Djajadi, head of capital market supervision at the Financial Services Authority. The fundraising included the IPO of tech giant PT GoTo Gojek Tokopedia, which raised $1.1 billion in April.
Founded in 1977, Pupuk Kaltim started as an offshore fertiliser project managed by Indonesian state energy firm Pertamina, which subsequently handed it over to the country's ministry of industry, according to its website.
Pupuk Kaltim became a unit of Pupuk Indonesia in 2012 and is now Indonesia's biggest urea and ammonia maker.
The Kalimantan-based firm has 13 factories, including five ammonia plants with a capacity of 2.74 million tonnes a year and five urea factories producing 3.44 million tonnes per year, its website shows.
Besides Pupuk Kaltim, other companies expected to go public in Indonesia this year include two units of Pertamina - Pertamina Geothermal Energy and Pertamina Hulu Energi.
Pertamina Hulu Energi could raise up to $2 billion, sources with knowledge of the matter told Reuters in December.
