Indonesia's Sinar Mas Plans Big Singapore IPO for Power Assets
November 10 2016 - 7:30AM
Dow Jones News
A conglomerate controlled by one of Indonesia's wealthiest
families is planning to list power assets in an initial public
offering of up to $800 million in Singapore, in what could be the
city's biggest IPO in four years.
Jakarta-based Sinar Mas Group, the Widjaja family's
energy-to-banking conglomerate, is planning to bundle the assets
into a business trust and sell units in the trust to the public in
the first half of 2017, according to people familiar with the
matter. Business trusts, a popular structure among investors in
Singapore, provide a hefty dividend for yield-hungry investors.
The company has hired Credit Suisse Group AG and Nomura Holdings
Inc. to handle the IPO, the people said.
Sinar Mas is planning to raise between $600 million and $800
million from the sale and bankers have already started gauging
appetite for the offering from investors, one of the people said. A
final decision hasn't been made on which of its assets will be
included in the deal, one of the people said.
If Sinar Mas succeeds in raising $800 million, the offering
would be the biggest to launch in Singapore since the May 2013 IPO
of Asia Pay Television Trust, an investment vehicle for cable-TV
operator Taiwan Broadband Communications, which raised $824
million.
With interest rates globally at record lows, investors have been
willing to buy into business-trust deals that offer high dividend
yields. Singapore's stock exchange is home to nearly 60 trusts,
including real-estate investment trusts, with a combined market
capitalization of about $71 billion. Some REITs now offer yields
close to 7%, while business trusts mostly offer even higher
yields.
Sinar Mas's energy and infrastructure unit, PT Dian Swastatika
Sentosa Tbk, has operations in power and steam generation, coal
mining and chemical trading, among other activities. The unit is
one of six run by the conglomerate, alongside its pulp and paper,
agribusiness and food, financial services, real-estate development
and telecommunications divisions.
Write to Alec Macfarlane at Alec.Macfarlane@wsj.com and P.R.
Venkat at venkat.pr@wsj.com
(END) Dow Jones Newswires
November 10, 2016 07:15 ET (12:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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