Nickel Industrial Strengthening Hillcon Holds IPO Offers 442.300 Million Shares

JAKARTA - PT Hillcon Tbk plans to list shares on the Indonesia Stock Exchange (IDX) through the Initial Public Offering (IPO) mechanism in the first quarter of 2023. In this corporate action, the Company will release a maximum of 442.300 million shares to the public.

The number of shares offered reached 15 percent of Hillcon's issued and paid-up capital after the share IPO and the initial price range offered is IDR 1,250 IDR 2,000 per share, so the target of the IPO funds obtained by Hillcon is up to a maximum of IDR 884.6 billion.

"About 55 percent of the IPO funds will be used to finance working capital related to mining production costs, including fuel costs, overhead costs, and maintenance of heavy equipment. The remaining 45 percent will be used to finance capital expenditures. This consists of equipment procurement to support operational activities in the nickel sector," said President Director of Hillcon, Hersan Qiu in Jakarta, Friday, January 13.

Hillcon's stock roadshow and initial offering (bookbuilding) is scheduled for January 12-26, 2023. An effective statement from the Financial Services Authority (OJK) is expected to be obtained on February 7, 2023. After an effective statement was issued, Hillcon shares are expected to be listed on the Indonesia Stock Exchange on February 15, 2023.

To smooth out this corporate action plan, Hillcon management has appointed PT Mirae Asset Sekuritas Indonesia and PT Sucor Sekuritas Indonesia as the Company's Implementing Underwriters, as well as Macquarie as the Underwriter. Hersan said that through this IPO Hillcon could participate in strengthening the nickel industry.

" Hillcon's IPO plan is part of efforts to develop business, create optimal value for the Company and stakeholders and in order to realize the Indonesian and global nickel industry ecosystem. That's why we are doing roadshows to offer shares to the public," said Hersan.

Hersan hopes that Hillcon will be able to attract investors to invest funds in Indonesia in order to strengthen the national economy and create jobs.

"Hillcon has good growth potential in line with technological developments. This solidifies Hillcon's steps to become a nickel industry player," he said.

According to Hersan, as a leading coal, nickel and civil work mining infrastructure company that provides construction services for the public and private sectors, Hillcon has a complete nickel business ecosystem. This is in line with the growth in sales of electric cars and increased consumption of the battery industry's nickel metal.

"This ecosystem is supported by domestic nickel producers. Indonesia is the largest nickel producer in the world," he said.

He emphasized that Hillcon's geographic reach allowed the Company to meet its customers' needs in diverse locations, and gave Hillcon the advantage of winning projects across the country. Currently Hillcon operates in a number of locations, namely in Kalimantan, Sulawesi and North Maluku. This allows the Company to meet customer needs in various locations throughout Indonesia.

This geographic range also gives Hillcon the ability to deploy resources to new projects across the country more quickly, increasing its competitive advantages in winning new projects, he said.

To note, world nickel consumption rose 17.2 percent in 2021 to 2.8 million tons compared to 2020 which grew only 0.6 percent. A total of 1.96 million tons of nickel metal (69 percent) was compensated by the Stainless Steel Industry.

Indonesia as the world's largest nickel producer has 950 thousand tons of nickel metal in 2021, or 35 percent of the world's total nickel production.

Indonesia also has the largest proven nickel reserves in the world. Indonesia has 22 percent of nickel reserves (21 million tons of nickel metal). According to ESDM, the reserve reaches 41 million tons of nickel metal.

Until September 2022, Hillcon experienced significant revenue growth. This was driven by an increase in mining production. The company was also able to maintain a strong gross margin of 27 percent as of September 2022.

Hillcon managed to book revenue of IDR 2.17 trillion as of September 2022, an increase of 68.22 percent compared to the same period in 2021 of IDR 1.29 percent. Hillcon's gross profit shot up by 10.39 percent, from IDR 524.6 billion as of September 2021 to IDR 579.1 billion as of September 2022.

Meanwhile, Hillcon's total assets increased 28.75 percent, from IDR 2.40 trillion in 2021 to IDR 3.09 trillion as of September 2022.