Banpu mulls listing its Indonesian unit

Banpu mulls listing its Indonesian unit.

Banpu announced yesterday that it is studying a plan to list its Indonesian coal unit on the Jakarta Stock Exchange, but intends to maintain its interest in the unit at 80 per cent.

Analyst said the listing, once finalised, was likely to be the catalyst for Banpu's stock in the future.

"It's still too soon to indicate which mines we will list. We need to take some time to study before reaching a conclusion," president Chanin Vongkusolkit said in an e-mail in reply to queries.

The listing on the Indonesian bourse will help Banpu expand its business in the country, said Chanin.

Banpu is expected to list its 100 per cent-owned holding company PT Indo Tambangraya Megah, which has majority interests in five Indonesian coalmines - Trubaindo, Indominco, Kitadin, Bharinto and Barasentosa - said Patcharin Kasemarnuntana, an analyst at Ayudhya Securities.

Listing its Indonesian subsidiary on the local stock market would gain Banpu the benefit of being a listed entity.

"This move is probably aimed to reduce regulatory risk," said Patcharin. "By allowing local participation of 20 per cent through the exchange, Banpu will not be viewed as a totally foreign company while it can easily tap funds in that market should expansion opportunities arise."

The listing plan, once finalised, may be a future catalyst for Banpu's stock price, said Patcharin. Yesterday, Banpu stock closed at Bt166, down 0.6 per cent on the day.

Ayudhya Securities rates Banpu a "buy", with a target price set at Bt201 per share.

Tisco Securities has recommended "buy" for Banpu, with a 12-month target price of Bt190.

Banpu's management has confirmed that it is strongly committed to business expansion plans for its coal and energy divisions. Most of the expansion will take place in China and Indonesia, while its operations in Thailand will be maintained at the current level.

The expansion plan will include several power projects in China and Indonesia and the acquisition of more medium-grade coalmines in Indonesia. In addition, a 1,500-megawatt coal-fired power plant is planned for Laos.

The company does not intend to participate in bidding for the next round of independent power producer contracts in Thailand.

Tisco estimates Banpu's earnings growth at 19.7 per cent year on year for 2007, boosted by a higher average selling price for coal and contributions from its energy business.

Banpu's management expects the average price for high-grade coal to hover at around the current level of US$50-$52 (Bt1,800-Bt1,872) per tonne in the regional market.

It assumed a slightly higher average coal selling price of $38 per tonne in 2007, up from $36 in 2006 based on a larger proportion of high-grade coal from Trubaindo. Its subsidiary BLCP's contribution should also increase year on year.

The Nation,

Dow Jones Newswires

The Nation
Friday January 12, 2007