Author: Gordon Platt

COMPANY TO WATCH: PT ADARO ENERGY/INDONESIA

Jakarta-based PT Adaro Energy, the holding company of Indonesia’s second-largest coal producer, raised $1.32 billion in the country’s biggest initial public offering ever by selling 34.8% of its share capital. PT Danatama Makmur was the lead manager for the IPO, which valued the company at $3.7 billion.

Indonesia is the world’s largest exporter of thermal coal used in power stations. The price of coal, like that of oil, has more than doubled in the past year to a record high on strong demand from China and India. PT Adaro Energy plans to use the proceeds of the IPO to help fund acquisitions and repay debt. The company plans to increase its coal production by 5% this year to 40 million metric tons. PT Adaro Energy mines low-sulfur coal in South Kalimantan in the Indonesian portion of the island of Borneo. The coal is very clean-burning and is used by US utilities to limit carbon emissions. It often is blended with higher-sulfur US-produced coal.


PT Adaro is one of the lowest-cost producers and exporters of coal and has a long-term concession. The shares will debut on the Indonesian Stock Exchange this month.

Gordon Platt