JAKARTA, June 11 (Reuters) - Indonesian thermal coal miner PT Toba Bara Sejahtera said on Monday it has cut the size of a planned June initial public offering to about $75 million, from previous expectations of up to $400 million, due to weak investor sentiment.
Toba Bara, controlled by former army general Luhut Panjaitan, plans to sell a 15 percent stake in the offering and has set a price range for bookbuilding at between 1,850 rupiah to 2,400 rupiah per share, one of its underwriters said.
“We have to cut the size because the market is volatile at the moment,” said Pandu Sjahrir, a Toba Bara director.
The price range values the company at up to 5.06 trillion rupiah ($539.16 million), compared to earlier expectations for a valuation of about $2 billion, as Europe’s debt crisis has led equity investors to demand a discount for offerings.
Many firms in Indonesia and globally have delayed plans to raise capital or canceled deals this year.
Toba Bara’s IPO price range values the company at a PE ratio of 5 to 6 times forward earnings, below 7 times for miner Harum Energy and 24.9 times for Bayan Resources, and far below owner Panjaitan’s hopes for getting at least 10 to 11 times.
Toba Bara has appointed Morgan Stanley, CLSA and local brokerage Mandiri Sekuritas as underwriters for the IPO. ($1 = 9,385 rupiah) (Reporting by Fathiya Dahrul; Editing by Neil Chatterjee)