Indonesia’s state-owned PT Perkebunan Nusantara III, also known as PTPN III, is finalizing the merger of four plantation subsidiaries into a newly setup PalmCo unit this month, then taking it public by the end of the year.
(Bloomberg) — Indonesia’s state-owned PT Perkebunan Nusantara III, also known as PTPN III, is finalizing the merger of four plantation subsidiaries into a newly setup PalmCo unit this month, then taking it public by the end of the year.
PalmCo, formed as the holding entity for PTPN’s oil palm plantation operations, is waiting for formal approval from creditors this month that would pave the way for the initial public offering process to kick off soon after, said President Director Mohammad Abdul Ghani, in an interview last week. Mandiri Sekuritas, DBS, BNP Paribas, CIMB have been appointed as underwriters.
“Just like in a car race, we are already standing at the start line, just waiting for the green flag to step on the gas,” Ghani said.
The initial share sale, which could raise as much as 10 trillion rupiah ($673 million), would cement Indonesia’s position as one the busiest spots for IPOs in 2023, with proceeds since the start of January through May up by 67% year-on-year, according to data compiled by Bloomberg.
Gold and copper miner PT Amman Mineral Internasional is seeking as much as 12.9 trillion rupiah from a July IPO, which would make it the country’s biggest this year, surpassing PT Trimegah Bangun Persada with 10 trillion rupiah raised in April.
Ghani said last year the company expects to raise between 5 trillion and 10 trillion rupiah from offering a 20% stake. He declined to confirm the IPO size in the interview on Thursday.
“We will use the funds for investing in downstream industry projects, including renewable energy production,” Ghani said. The company will start construction of a biodiesel plant in Sei Mangke economic zone, in North Sumatra, this year, seeking to start production in January 2024.
Other points from the interview:
- PTPN III plans to boost its annual cooking oil output to 1.8 million tons in 2026 from 460,000 tons. The two projects will need about $270 million in spending, including the cost to expand plantations to 650,000 hectares over the next five years.
- The group also plans to develop its sugar manufacturing to support the national food and energy sufficiency program. Indonesia is the world’s largest buyer of raw sugar, according to the US Department of Agriculture’s Foreign Agriculture Service report.
- Another new entity called SugarCo will be set up in a bid to boost annual output to 2.1 million tons in 2026 from 768,000 tons currently
- Company to double its sugar cane plantations to 100,000 hectares by converting some rubber, coffee or cocoa estates and importing new sugar cane varieties from Australia and Brazil. Another estimated 16 trillion rupiah will be needed for the plan
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