Terregra Asia becomes first renewable energy company to list on IDX
JAKARTA (TheInsiderStories) - PT Terregra Asia Energy will become the first renewable energy company company that will list its shares on the Indonesia Stock Exchange (IDX). The company sets the offering price of Rp 200-330 per share and aims to raise up to Rp198 billion from the initial public offering (IPO).
Terregra will issue a total of 600 million new shares, or approximately 21.43 percent of the total paid up capital. The company has appointed Lautandhana Securindo to underwrite (lead underwriter) the IPO.
IPO bookbuilding process will take place on 10 to 19 April 2017. While an effective statement from the Financial Services Authority (FSA) is targeted to be obtained on April 27 with a target listing on the Stock Exchange on May 9, 2017.
Vice President Terregra Asia Energy Daniel Lasman reveals that the company's business covers the island of Sumatra and East Indonesia. Sumatra is a region with a large enough hydro potential. While the eastern part of Indonesia is very potential for solar power generation.
"Electricity demand in Sumatra is still higher than Java Island," he said in Jakarta on Monday (10/4). He added, Terregra will use 44 percent of the IPO proceeds to inject capital as equity to its subsidiaries while 56 percent will be used for developing some renewable energy projects.
The company has two subsidiaries that run power plant business, namely PT Terregra Hydro Power (THP) which develops hydropower plants as well as PT Terregra Solar Power (TSP), involving in the field of solar power plants development.
In the next five years, THP will be working on 12 projects of hydro power plants and mini hydro with a total capacity of up to 490 megawatts (MW). Four projects are going to start operating this year with a total capacity of 36 MW, with total investment of US$70-90 million.
According Lasman, the value of the investment to build renewable energy power plants are quite expensive, up to $2.5 million per megawatt (MW). Terregra has signed a power purchase agreement (PPA) with the state electricity company PT PLN for the four projects. The PPA will last for 20-30 years.
The four projects will start construction this year and will be operational in 2019. "The IPO funds are needed to fund the four projects," he said.
Director of Lautandhana Securindo Wientoro Prasetyo said no renewable energy power generation companies listed on the Stock Exchange so far, making it a very unique company. He also claimed to be very careful in determining stock price of Terregra.
It offers Terregra stock prices with price ratio compared to earnings per share (price to earnings per share ratio (PER) of 7,4-12x of the company's performance in 2019.
Terregra projects its net profit to rise to Rp 75 billion om 2019.
Based on the financial report in October 2016, the company booked revenues of Rp 9 billion in the ten months period, with gross profit of Rp1.84 billion and operating profit amounted to Rp1.22 billion. While the company's assets amounted to Rp283.435 billion.
Director of Terregra Djani Sutedja said the prospect of the electricity industry in Indonesia in the future remains bright given the country's steady economic growth and continued rise of population.
By 2050, the demand for electricity is projected to increase significantly to more than six times to 307 giga-watts (GW). In 2015, the national power generation capacity was 57 GW, consisting of PLN 76 percent, IPP 15 percent, and PPU IO 9 percent.
"The company's mission is to develop and promote clean and renewable energy in Indonesia, provide electricity in remote areas, to reduce emissions and the carbon footprint on the earth, and to empower and improve the quality of life of the surrounding community," he said. (*)