IPO of Sumber Mineral Global Abadi (SMGA), Spur Nickel and Coal Business

JAKARTA - Prospective issuer PT Sumber Mineral Global Abadi Tbk (SMGA) will boost its nickel and coal trading business after its initial public offering (IPO).

 PT Sumber Mineral Global Abadi carries out its business activities in the field of nickel and coal trading for the domestic market in Indonesia. SMGA is part of the PT Sumber Global Energy Tbk. (SGER) business group, which is a coal trading company in the export and domestic markets.

 SMGA holds three Mining Business Licenses (IUP) - Special Production Operations (OPK) for the transportation and sale of metal mineral commodities, coal commodities, and non-metal mineral commodities.

 In SMGA's IPO process, the offering period is conducted on January 8-11, 2024. SMGA will issue 1,750,000,000 (1.75) billion shares with a nominal value of Rp20 per share. The offering price is Rp100-Rp105, so SMGA has the potential to raise IPO funds of Rp175 billion-Rp183.75 billion.

 The IPO proceeds will be used as working capital to procure nickel and coal in accordance with SMGA's business activities. The company also makes payments for the purchase of nickel and coal from suppliers.

 Julius Edy Wibowo said that the Group has more than 15 years of experience in the energy industry in general and mining commodity trading since 2008. SMGA's IPO aims to continue its growth so as to increase revenue and profit.

 "With the IPO, the company also creates sustainable growth and synergy and has better and professional governance in carrying out its business activities," he added.

 Moreover, the commodity industry, especially nickel, is growing. Variations of nickel products ranging from stainless steel to currently booming electric vehicles.

 "We see that the whole world is moving towards electric vehicles (EV), so I see this as a great opportunity, first of all our country has huge resources and secondly the world's needs in this industry are also very large," he explained.

 The underwriter in SMGA's IPO is PT Victoria Sekuritas Indonesia. Director of Victoria Sekuritas Indonesia, R.A. Wisnu Widodo expressed his confidence in SMGA's growth and business prospects going forward.

 SMGA's business in the nickel trading industry has the potential to grow with the support of increasing nickel demand for stainless steel and EV batteries. For the coal segment, SMGA also managed to secure contracts with IUP-OP owners and traders of low calorie coal (equivalent to ICI 5) which is important for domestic use of power plants.

 In addition, SMGA's business prospects through its subsidiary, PT Jasatama Mandiri Sukses (JMS), is engaged in limestone mining. Limestone is an important material used as a mixture in the nickel ore processing industry to remove impurities such as silica and phosphorus.

  JMS mining activities are located in Bungku Pesisir Sub-district, Morowali Regency, Central Sulawesi Province with an area of 85.73 ha. Based on the exploration results conducted by JMS, the limestone reserves owned by JMS currently amount to 300 million tons with an estimated mine life of around 150 years.

Sources : market.bisnis.com- Jan 10.24

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