Indonesia’s Harita Group Aims To Raise Nearly $1 Billion In Nickel Unit IPO

Indonesia’s Harita Group is selling shares in its nickel unit Trimegah Bangun Persada in a large initial public offering that could make the net worth of billionaire owner Lim Hariyanto Wijaya Sarwono soar.

According to the company’s prospectus, Trimegah Bangun Persada will raise between 14.7 trillion rupiah ($960 million) and 15.1 trillion rupiah ($983 million) by offering up to 12.1 billion shares, or 18% of its total, at a price range of 1,220 rupiah to 1,250 rupiah.

The Indonesian miner is aiming to tap rising demand for materials needed to make batteries for electronic vehicles. Trimegah Bangun Persada was founded in 2004, and bought three years later by Harita Group. It has a concession to mine nickel on Obi Island in North Maluku province.

Underwriters for the IPO include, among others, BNP Paribas, Citi, Credit Suisse and Mandiri Sekuritas. The shares will begin to trade on the Indonesian Stock Exchange on April 12, according to the company perspective.

Trimegah Bangun Persada will use the IPO proceeds for debt repayment, working capital, capital expenditure and paid-up capital in subsidiaries. “We aim to expand production capacity in our nickel processing facilities, in line with the government’s vision in accelerating the mining downstream industry in Indonesia,” Roy Arman Arfandy, president director of Trimegah Bangun Persada, told Forbes Asia on Wednesday.

The company is having a book building process from 15 March till 24 March. It held road shows for global investors in Singapore, Hong Kong, the U.S., and European countries and will hold a public expose in Jakarta on Friday. “We received strong interest from global and local potential investors,” said Arfandy.

Lim Hariyanto Wijaya Sarwono owns 82% of Trimegah Bangun Persada through his holding companies Harita Jayaraya and Citra Duta Jaya Makmur. The IPO could raise his net worth from $1.1 billion to $4.8 billion. Apart from the nickel unit, the family owns a majority stake in Singapore-listed palm oil company Bumitama Agri and Indonesia-listed bauxite mining firm Cita Mineral Investindo.

Trimegah Bangun Persada initially exported its nickel ore to the global market. However in early 2014, the Indonesian government banned the export of nickel ore to stimulate domestic mining downstream industry that is expected to spur economic value for Indonesian people through job creation and investment, as well for the government through state income. The government eased the policy between January 2017 and December 2019 with allowing the export of nickel ore with below 1.7% nickel content, and fully banned any export of nickel ore starting January 2020.

In response to the government policy, since 2015 Trimegah Bangun Persada has been expanding into nickel processing industry with a total investment of $1.2 billion. It started the construction of rotary kiln electric furnace (RKEF) smelter in 2015, which began producing ferronickel in 2017. In 2019, it began the construction of two lines of high pressure acid leach (HPAL) plant that started producing mixed hydroxide precipitate, a nickel intermediate product, in 2021.

For the first eleven months of 2022, the company reported revenue of 9 trillion rupiah ($586 million), an 18% increase from $499 million a year earlier, with a net profit of $280 million, a 3.3-fold rise from $83 million a year earlier.