Adaro Logistics, a subsidiary of Indonesian coal mining company Adaro Energy, is expected to undertake an initial public offering (IPO) on the Indonesia Stock Exchange in 2018. Garibaldi Thohir, President Director of Adaro Energy, is optimistic about the potential of publicly listing the unit in Indonesia as prospects for Indonesia's equity market are promising. Moreover, when a company goes public then it becomes more transparent, and this should improve the company's management.
Adaro Logistics is tasked with the implementation of an integrated supply chain system for delivering coal from the source (pit) to the port, or, direct customers (including power stations).
Adaro Logistics has several subsidiaries, including Maritim Barito Perkasa,
Puradika Bongkar Muat Makmur, Sarana Daya Mandiri and Indonesia Bulk Terminal.
Through the IPO Adaro Logistics would generate funds required to diversify its business. The company wants to reduce its dependence on coal by delivering logistics services in other sectors, such as the oil and gas sector.
Meanwhile, Adaro Energy is well on its way to transform into an integrated energy company, rather than simply relying on coal mining. Currently, the company generates 50 percent of its revenue from coal mining, 40 percent from mining logistics, and the remaining 10 percent from electricity. Over the past couple of years the Adaro Group entered the power generation sector as persistently low coal prices made it unattractive for the company to remain solely focused on coal. Furthermore, recently Adaro Energy announced it also wants to add the water treatment sector to its portfolio.
The Japan Credit Rating Agency recently upgraded its rating for Adaro Energy from "BBB-/stable outlook" to "BBB-/positive outlook".
Besides Adaro Logistics, another subsidiary of Adaro Energy may also go public in Indonesia in the next couple of years. Adaro Power is regarded a suitable candidate to enrich the Indonesia Stock Exchange.
On Monday (03/07), shares of Adaro Energy listed on the Indonesia Stock Exchange surged 3.16 percent to IDR 1,630 a piece. So far this year, however, its shares have slid 2.83 percent.
Source: Indonesia Investments
03 July 2017