Indonesia exploring potential listing of Pertamina geothermal and drilling units

Lahendong Unit 2 plant Sulawesi, Indonesia (source:
Alexander Richter 12 Jan 2012

Indonesia's government is exploring the possibility of an IPO of Pertmania's geothermal and drilling companies on the Indonesia Stock Exchange, as part of wider plants to list state-owned companies.

Reported yesterday from Jakarata, Indonesia’s government is pushing for “more state companies to undergo initial public offerings this year to improve performance and transparency, several say they are not yet ready.

The State Enterprises Ministry said that Pertamina’s units Pertamina Geothermal Energy and Pertamina Drilling Services Indonesia may carry out IPOs this year. But Pertamina, the state-owned oil and gas company, said that it was still weighing the feasibility.

“We’re still in the preparation stage,” Pertamina spokesman Mochamad Harun said on Wednesday. He did not confirm if the companies were ready for an IPO.

Pertamina controls 90 percent of PGE, which operates geothermal facilities. It also has a 99 percent stake in PDSI, which has 34 drilling rigs.

State Enterprises Minister Dahlan Iskan said on Tuesday that PGE and PDSI were among state companies that would conduct offerings this year. Other state companies that have been put on the list include Semen Baturaja, state pawnshop Pegadaian, and a unit of national flagship carrier, Garuda Maintenance Facility AeroAsia.

“In principle, if they are ready, then go ahead,” Dahlan said.

Dahlan said that proceeds from sales in IPOs and bonds could improve a company’s performance and good corporate governance. As a publicly traded company, an IPO would put the company’s performance under public scrutiny.

President Susilo Bambang Yudhoyono said during the first day of trading this year on the Indonesia Stock Exchange that he expected to see more state companies carrying out IPOs.

In February 2011, the state flag carrier Garuda Indonesia sold shares to the public. In 2010, the Indonesia Stock Exchange saw state construction company Pembangunan Perumahan and state steelmaker Krakatau Steel go public.

Last week, Dahlan said that about eight state companies would have IPOs this year. That would be 30 percent more than was originally sought.”

Source: The Jakarta Globe