Harita Nickel to soon kick off $650 million Indonesian IPO

Indonesian President Joko Widodo. (Photo courtesy of PR of Cabinet Secretariat | Rahmat.)

Indonesian metal and mining firm PT Trimegah Bangun Persada started taking orders on Wednesday for an initial public offering of as much as $647 million, according to terms of the deal seen by Bloomberg News.

The company, also known as Harita Nickel, is offering as many as 8.1 billion shares at 1,220 to 1,250 rupiah each, according to terms confirming an earlier Bloomberg News report. At the top end of the price range, Harita Nickel would have a market value of about $5.1 billion. It’s taking orders from Wednesday and plans to price the offering March 24. Trading in the shares is expected to start April 12.

At $647 million, Harita Nickel’s IPO would surpass PT Pertamina Geothermal Energy as Indonesia’s biggest this year, according to data compiled by Bloomberg. State-backed Pertamina Geothermal raised about $604 million in its first-time share sale in February.

The nickel industry sits at the heart of President Joko Widodo’s vision of developing an end-to-end electric-vehicle supply chain onshore. Carmakers including Hyundai Motor Co. and Mitsubishi Motors Corp are setting up local EV plants, seeking to ensure continued supply of nickel for their batteries as Indonesia bans ore exports.

Harita operates the country’s first high-pressure acid leaching smelter on Obi island in North Maluku, according to its website. The HPAL process turns the local low-grade ore into mixed hydroxide precipitate — a form of nickel that can be further processed to make batteries. Its HPAL facility has a production capacity of 55,000 tons a year. Next year, a new plant would more than double its output to 120,000 tons.

It is partnering with China’s Lygend Resources & Technology Co. to complete facilities to process mixed hydroxide precipitate into nickel and cobalt sulfate, which are more refined versions of the metals. Harita also produces ferronickel by operating several electric-furnace smelters.

The company plans to use proceeds from the share sale for capital expenditures, repayment of outstanding loans and working capital, among other things. Credit Suisse Group AG, BNP Paribas SA, Citigroup Inc. and PT Mandiri Sekuritas are joint global coordinators of the offering.

(By Yudith Ho and Filipe Pacheco)


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