PT Barito Renewables Energy Tbk, the geothermal energy-focused unit of the Indonesian conglomerate PT Barito Pacific Tbk, is looking to raise up to 3.5 trillion rupiah ($228 million) through a domestic initial public offering (IPO).
According to a prospectus filed by the company to the Indonesia Stock Exchange (IDX) on Friday, Barito Renewables will issue 4.5 billion shares in the IPO, representing a 3.35% stake in the company. The shares with be priced at 670-780 rupiah apiece.
The book-building exercise is scheduled for Sept 18-25, 2023. The public offering will be on Oct 2-4. BNI Sekuritas has been appointed as the underwriter of the IPO.
The company will list on the IDX on Oct 6. and trade under the ticker symbol BREN.
Barito Pacific is the majority shareholder of Barito Renewables Energy with a 66.67% stake. The rest is owned by Green Era Energy (24.33%), Jupiter Tiger Holdings (4.5%), and Prime Hill Fund (4.5%).
After the IPO, the ownership of Barito Pacific will fall to 64.43%, while that of Green Era Energy will be 23.52%. Jupiter Tiger Holdings and Prime Hill Fund will own a 4.35% stake each after the company’s initial share sale.
Barito Renewables Energy’s profits in the first quarter of 2023 stood at $29.24 million, up 31% year-on-year from $22.33 million. Its revenue stood at $147.08 million in Q1 2023, up 10% from $133.65 million in the year-ago quarter.
Bisman Bhaktiar, executive director at the Center for Energy and Mining Law Studies (PUSHEP) said that Indonesia is the biggest geothermal energy producer in the world while the utlisation is still low, which suggests there is good potential for investors.
However, the price of geothermal energy is not attractive as the state-owned enterprise PLN is the only buyer of geothermal energy in Indonesia. “Therefore, the government is improving the regulation of energy, which can help producers fix attractive prices for geothermal energy,” Bhaktiar told DealStreetAsia.
The funds raised from the IPO will be used to inject capital into Barito Renewables’ unit Star Energy Geothermal (STAR), which will then be used to repay $158.6 million in debt to Bangkok Bank. STAR will also complete certain financing obligations and refund a downpayment to Star Energy Oil and Gas Pte Ltd amounting to $72.5 million, the prospectus said.
DealStreetAsia reported earlier that Barito Renewables was looking for funding to increase its stake in Star Energy Geothermal, a provider of energy to the Salak-Darajat geothermal power plant, to 100%. Currently, Barito, through Star Energy Group Holding Pte Ltd, owns an 80.2% stake in Star Energy Geothermal. The rest is owned by Acehi Netherlands BV.
Founded in 1979 by Prajogo Pangestu, Barito Pacific mainly focuses on energy and petrochemicals.
In petrochemicals, Barito owns PT Chandra Asri Petrochemical Tbk with Thailand’s SCG Chemicals Public Company Limited. While, in energy, Barito, through Star Energy, operates geothermal assets with a combined capacity of 875 MW.
In the first half of 2023, Barito Pacific recorded a net profit of $82 million, up 173.3% compared with $30 million clocked in the same period last year. This was despite revenue in H1 2023 falling 15.1% to $1.37 million given the volatile supply and demand in the petrochemicals sector.
The reported IPO of Barito Renewables Energy will add to the growing number of listings in Indonesia this year. IDX has added 65 new listed companies this year. They raised a cumulative 49.2 trillion rupiah. Twenty-six other companies are lined up for an IPO, with six of them being big companies with assets over 250 billion rupiah.