Friday, April 19, 2024

Two nickel mining company go public early this year

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Gusty da Costa

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Robust sales of electric vehicle (EV) and its key component − battery − have led to increase demand of solid nickel, which subsequently lure mining business players to increase their production capacity and profiles, including two nickel mining companies − PT. Sumber Mineral Global Abadi and PT. Adhi Kartiko Pratama − which have decided to go public in early 2024.

PT Sumber Mineral Global Abadi (SMGA), a company engaged in the wholesale trading of nickel ore and coal, will conduct an Initial Public Offering (IPO) listing on the Indonesia Stock Exchange (IDX). According to the prospectus, as reported by CNBC Indonesia, SMGA will issue as many as 1,750,000,000 new shares, which are ordinary shares with names, or as much as 20.00 percent of the company’s issued and paid-up capital with a nominal value of Rp20 per share.

The price offered to the public is Rp 100 to Rp 105 per share. Thus, the company will get fresh funds of Rp 175,000,000,000 or US$ 11,27 million to IDR 183,750,000,000 or US$ 11,83 million.

To smoothen this corporate action, the company will appoint PT Victoria Sekuritas Indonesia as the guarantor and executor of the securities emission.

Later, the proceeds from this IPO after deducting emission costs will be used entirely for payment for the purchase of nickel and coal from suppliers to fulfil procurement contracts.

The temporary schedule of SMGA’s IPO is as follows:

Initial Offering Period: 8 – 11 January 2024
Estimated Effective Date: 19 January 2024
Estimated Public Offering Period: 22 – 25 January 2024
Estimated Allotment Date: 25 January 2024
Estimated Share Distribution Date: 26 January 2024
Estimated Listing Date on the Indonesia Stock Exchange: 29 January 2024

Besides SMGA, nickel mining company PT Adhi Kartiko Pratama (NICE) had earlier gone public early this month. NICE has set an initial share price of Rp 438 in its IPO. Based on the prospectus, NICE will offer 1.21 billion ordinary shares owned by the controller or equivalent to 20 percent of the total issued or fully paid capital after the IPO.

With the initial price pegged, the generated IPO funds are Rp 532.95 billion or US$ 34.33 million. All proceeds from the initial public offering will be received by the selling shareholders, while NICE will not receive any IPO proceeds.

The public offering period for NICE shares was scheduled for 3-5 January 2024 with an allotment date of 5 January and an electronic distribution date on 8 January 2024.

NICE will be officially listed on the Stock Exchange on 9 January 2024. Based on the financial statements contained in the prospectus, NICE has liabilities that are greater than its equity or capital. Recorded as of June 2023, this prospective issuer engaged in nickel ore mining has total liabilities of Rp146.48 billion or US$ 9.43 billion with details of short-term liabilities at Rp128.45 billion or US$ 8.27 million and long-term liabilities at Rp18.23 billion or US$1.17 million. The equity was recorded at Rp. 119.03 billion or US$ 7.66 million.

Meanwhile, as of June 2023, NICE posted a 48.10 percent decline in net profit to Rp40 billion or US$ 2,57 million compared to the same period last year of Rp78.12 billion or US$ 5 million . The decline in profit was in line with sluggish sales. NICE posted sales in the first half of 2023 of Rp 378.56 billion or US$ 24 million, 11.50 percent lower than the same period last year of Rp. 427.79 billion or US$ 27.5 million. Although sales fell, cost of sales actually increased to Rp311.70 billion or US$ 20 billion, compared to the second half of 2022 which was recorded at Rp308.36 billion or US$ 2.36 million.

Gusty da Costa

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