Darma Henwa expects to raise $200 million from share offering

Friday, August 03, 2007
The Jakarta Post, Jakarta

Coal mining contractor PT Darma Henwa plans to sell 3.15 billion new shares during the company's initial public offering (IPO) in early September, a senior company executive says.

Speaking during a public briefing Thursday, Darma Henwa's president director Hamdan Handoko said that the shares, accounting for about 30 percent of its enlarged stock, would be offered to the public from Aug. 28 through 30 at a price range of between Rp 290 and Rp 375 per share

"We expect to raise about US$200 million from the public offering," he said, adding that the shares would be listed on the Jakarta Stock Exchange (JSX) on Sept. 6.

PT Danatama Makmur Investment Bank has been chosen as the lead underwriter.

Hamdan said that the company would use 60 percent of the IPO proceeds to finance the capital expenditure on the development of its Bengalon's project, 50 percent to finance its capital expenditure on the Asam Asam project and the remainder to strengthen its working capital.

Chief commissioner Rini M. Soemarmo said the company had recently signed contracts worth $4.75 billion with PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia for mining work in Bengalon, East Kalimantan, and Asam Asam in South Kalimantan, respectively.

PT Darma Henwa was established in 1991 and marked its debut with a $100 million contract with BHP Minerals for a project in Petangis, South Kalimantan. The company is 85 percent owned by Zurich Assets International Ltd. and 5 percent by PT Indotambang Perkasa.

With its established track record of working with some of the largest mining firms in the world, such as BHP Billiton, INCO, Rio Tinto, Newmont and Freeport, and its participation in the government's "10,000 Megawatts" project, as well as current high coal prices, Steffen Fang, the vice president of Danatama Makmur said he believed that Darma Henwa's IPO would be attractive to both local and foreign investors.

In the first semester of this year, the company's revenues and net income reached $109 million and $2.5 million, respectively. The company expects to book total revenue of $252 million this year, with net profit amounting to $8.5 million.

Hamdan said that revenue was projected to increase to $317 million in 2008 and $335 million in 2009, while net profit was expected to reach $24 million next year and $44 million in 2009. (02)