Indonesia's largest steelmaker Krakatau Steel is looking to earn up to IDR 3.47 trillion ($389 million) from an initial public offering scheduled for next month, Indonesian sources say.
The steel producer would sell 3.15 billion new shares or about 20 percent of the company's enlarged stocks at a price range of between IDR 800 ($0.80) and IDR 1,150 per share. Following the offering that will value the firm at nearly $2 billion, the government's share ownership will decline to 80 percent, as the remaining 20 percent will be held by the investing public.
The book-building period started on October 11 and will end on October 22. The new shares will be offered from November 2 to 4 and they will be officially listed on the Indonesian Stock Exchange on November 10.
Krakatau will use the proceeds to upgrade the company's hot strip mill capacity to 3.5 million mt per year by 2013 from the current 2.4 million mt and to develop an area in Banten, West Java for the location of a new steel factory.