Indoferro expects to raise $300 million from IPO

PT Indoferro, an iron smelting company owned by Growth Steel Group (GSG), plans to sell new shares of about 30 percent of its enlarged shares through an initial public offering (IPO) which will be held next year.

Jonatan Handojo said in Jakarta last week that Indoferro expected to raise about US$300 million from the IPO to partly finance the company?s expansion plan.

Handojo said the company would name two foreign securities company and one local securities firm which would act as underwriters of the IPO. Indoferro is part of GSG which has been engaged in smelting activities for 43 years.

At present, Indoferro produces pig iron and nickel pig iron at the company?s smelting plant in Cilegon, Banten. The smelting plant which uses a blast technology has a capacity to produce 550,000 tons a year. The company operates its own power plant with a capacity of 2 x 15 MW to support the operation of the smelting plant.

The company also produces coking coal with a capacity of 400,000 tons a year at the smelting plant in Cilegon.

Jonathan said that Indoferro planned to double the production capacity of its pig iron to 1.1 million tons a year to meet the surging demand. The production of coking coal will be also increased to 600,000 tons a year.

He said the company would also build a stainless steel plant with a capacity of 2 million tons a year as part of the expansion which would cost the company about US$150 million.

The expansion would increase the company?s total investment to about US$350 million. (*)