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Legal Focus
JANUARY 2013
Indonesia
What is the current state of the IPo market in your country? How has it altered over the last decade?
The IPO market can probably be best described as being apprehensive in Indonesia at the current time. Nonetheless, however, 2012 has seen a number of IPOs and there is talk of strategic IPOs by mining companies in anticipation of divestment requirements.
What do you attribute this change to?
The fall in coal prices has certainly affected IPO prospects of Indonesian coal companies by ensuring that only those with exemplary finances and operations and those who can secure strategic investors as part of the book building process could successfully proceed to IPO. Similar effects can also be seen in other industries, with the threshold for a successful IPO being necessarily higher due to global volatility, even in the otherwise comparatively stable Indonesian business sphere.
What complexities and challenges face a company when taking it to its IPo? How can you assist your clients in overcoming these challenges?
Pre-IPO due diligence is the typical service, however, where true value can be added is in the more complex pre and post-IPO structuring of the deals that LGS excels at, combined with the coordination of the interaction of the IPO transaction with the existing contracts, loans and other relationships of the company.
What challenges has the IPo market faced in the aftermath of the financial crisis, and how has it navigated these?
Achieving the desired IPO prices has been more challenging, which has resulted in smaller initial floats and at times a reduction in the issue price from the earlier planned. Companies have responded by placing an increased focus on book building and at times delaying listings.
What recent IPos have you been involved in?
A good example of the complex IPO, and associated, transactions that LGS excels at is the IPO of PT Bank Tabungan Pensiunan Nasional which was conducted as part of the acquisition by Texas Pacific Group (private equity) and the purchase of the bank from the state asset management firm.
What do you think the future holds for the IPo market in your country?
The Indonesian IPO market will continue to be highly dynamic, with a number of state-owned enterprises planning listings, strategic listings by natural resource companies in the context of foreign ownership / divestment requirements, and a constant flow of companies that are seeking access to capital in a rapidly growing Indonesian market. Additionally, becoming a public company is increasingly seen in the context of improving corporate governance and transparency, which has the benefit of easier access to financing and also of general public, government, and customer perception. LM
address:
Menara Imperium 30th Floor Jl. H. R. Rasuna Said Kav. 1 Kuningan, Jakarta 12980, Indonesia
tel: +62 21 831-5005, 831-5025 Fax: +62 21 831-5015, 831-5018 Email: ganie@lgslaw.co.id Website: www.lgsonline.com
IPO Landscape
The Initial Public Offerings landscape is full of complexities and challenges as the markets continue to feel the aftermath of the financial crisis and strive towards recovery. To find out about the IPO landscape and the issues that surround it in Indonesia, Lawyer Monthly speaks to Mohamed Idwan (‘Kiki’) Ganie, Managing Partner of Lubis Ganie Surowidjojo (LGS). Dr. Ganie has more than 30 years of legal experience, and specializes in commercial transactions and commercial litigation, including alternative dispute resolution and has acted as an expert in a number court and arbitration proceedings. His expertise covers general corporate/company law, banking law, finance, bankruptcy and restructuring, mining, investment, acquisitions, infrastructure projects/project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance.
LGS was founded in 1985 by Timbul Thomas Lubis, Dr. Ganie and Arief Tarunakarya Surowidjojo. Since then, LGS has grown into the largest corporate transactions and corporate litigation firm in Indonesia. LGS has also obtained Lloyd’s Register Quality Assurance certifications of ISO 9001:2008 for Quality Management systems and ISO 14001:2004 for Environmental Management systems to ensure the quality of all aspects of the firm’s operations and services.
contact details:
dr. Mohamed Idwan (‘Kiki’) Ganie Managing Partner Lubis Ganie Surowidjojo