This Gold Mining Company Owned By TheConglomerate Peter Sondakh Delays IPO Plans, Even Though Has Potential To Raise IDR 7.2 Trillion

The Peter Sondakh conglomerate. (Photo: Doc. Indonesia Stock Exchange)

JAKARTA - PT Archi Indonesia has postponed its initial public offering (IPO) action plan. The reason is that the Rajawali Group business entity in the gold mining sector assesses that market conditions are still unstable.

Quoted from Bloomberg, Thursday, April 22, the gold bullion producer Lotus Archi was going to conduct an IP with a target of reaching 500 million US dollars or equivalent to IDR 7.2 trillion. The proceeds from the IPO proceeds will be used by the company to repay existing loans.

Credit Suisse will act as joint lead manager for the action. A Bloomberg source stated that the decline in gold prices and the JCI in the last few trades was the main factor in delaying the IPO plan.

However, Archi Indonesia does not rule out the possibility of realizing the plan to be listed on the Indonesia Stock Exchange if market conditions are considered to be improving. Based on Bloomberg data, throughout the year 2021, the price of gold in the spot market has corrected 6.21 percent and has dropped 14 percent from the record high level in August 2020 in line with market optimism that the COVID-19 vaccine will trigger global economic recovery.

Meanwhile, the JCI during the year 2021 was still moving in the green zone but only rose 0.26 percent. The JCI has also dropped 7 percent from its almost three-year high in mid-January 2021.

Meanwhile, Archi Indonesia was close to conducting an IPO at the end of 2014. However, at that time it was also postponed because the market situation was seen as unfavorable due to volatile commodity prices and uncertain global macroeconomic conditions.

At that time, Archi Indonesia was planning to sell as many as 1.6 billion shares in the price range of IDR 1,895 - IDR 2,445 per share, so that previously Archi Indonesia had the potential to get fresh funds of up to IDR 3.9 trillion.

For information, Archi Indonesia is fully owned by PT Rajawali Corpora or the Rajawali Group founded by conglomerate Peter Sondakh. PT Archi Indonesia owns 100 percent of shares in the Toka Tindung gold and silver mining project in North Sulawesi.

The mining rights for the company's Toka Tindung project are through the Contract of Work of two Archi's business entities, namely PT Meares Soputan Mining and PT Tambang Tondano Nusajaya. The two KKs have a total of around 40 thousand hectares valid until 2041, with a possible extension of the term of 2 x 10 years. Since its establishment in 2010, Archie Indonesia has produced more than 8 tonnes of gold per year.