PT Archi launches up to $379m Jakarta float

Indonesia’s gold mining operator PT Archi began roadshows, this week, for its upcoming initial public offer (IPO) that aims to raise between Rp3.5 trillion to Rp 4.6 trillion ($295 million to $379) million.

PT Archi is part of the Indonesian conglomerate Rajawali Corp, controlled by tycoon Peter Sondakh. In addition to mining, the group also has interests in hotels, agriculture and transportation.

The roadshows will extend till November 25. The company plans to do a domestic offer on December 8 and 9, followed by allocation on December 11. It is expected to begin trading on the Jakarta exchange from December 15, this year.

PT Archi will be offering 1.879 million shares, priced between Rp1895 and Rp2445 (per share). At the upper price range of this band, the firm is valued at  $729 million. This is significantly higher than the $533 million valuation it received, while listing (briefly) on London’s secondary AIM market, as Archipelago Resources, in September 2013.

“The shares that we are offering to the public are equal to 40.4% of the issued and the paid up share capital after the public offering, with a price range of Rp 1,895 to Rp 2,445 per share,” Archi finance director Edwin Gunawan said, according to a report in its local media, The Jakarta Post.

The company will use $216.2 million of the proceeds to pay its debt, due at year-end, to the London-based gold miner Archipelago Resources PLC. $35.9 million will be used to acquire a 99.98% stake in PT Smart Mining Resources and the remaining $67.6 million will be used as working capital, the report added.

CIMB Securities, Danareksa, Mandiri Securities and Valbury Asia Securities are the underwriters for the offering and its global coordinators are Bank of America Merrill Lynch and Standard Chartered.

The PT Archi IPO is coming out during a challenging time. Domestic demand for recent IPOs has been poor in Indonesia. Two recent listings – taxi operator Blue Bird and Internet service provider Link Net – had to cut down their float size significantly.