State-owned Gas Company (PGN) Sold at Cheap Price

Jakarta(IOGNews)-Minister for State-Owned Companies, Sugiharto, sold 5.31% shares (185.8 million shares) of PT Perusahaan Gas Negara Tbk (PGN) yesterday even though the share price of the company was still low compared to its highest share price that reached Rp13,600 per share.

The shares offered starting at book building on floor price of Rp10,995 (rounded to Rp11,000), at discount of 2.7% from yesterday closing price which was Rp11,300 per share. State Ministry for state-owned companies once said on August 2006 that the fair value for PGN can reach up to Rp18,000 per share.

Using this calculation, the government should obtain Rp2.04 trillion from divesting PGN shares while the government would be able to obtain Rp2.53 trillion if the government sold the shares at its highest level share price, about four months ago. Thus, the government has a potential loss of Rp490 billion from this transaction.

The government has appointed selling agent for this process: Bahana Securities, Danareksa Securities, and Credit Suisse. President Director PGN, Sutikno confirmed that the execution of divesting PGN shares starts today.

In the analyst report issued by Danareksa securities on November 15, 2006, it is estimated that the share price of the company may be able to reach Rp15,850 per share next year. In addition, Sutikno said that the company has projected to book revenue of Rp7 trillion with a net profit of Rp2 trillion – Rp2.1 trillion.

As the SSWJ (South Sumatera West Java) first and second phase have started their operation next year, the company’s sales may increase from 360 million cubic feet per day to 585 million feet cubic per day.