· Bumi Resource Mineral, Bumi Resource subsidiary for non coal business, has obtained the green light from the Indonesian Stock Exchange to proceed with its IPO plan as the bourse see that one of BRM’s business unit has started to produce revenue this month. Unfortunately, the bourse refuses to share data enlightening which business contributed revenue to BRM.
· Previously, Indonesia Stock Exchange could not agree BRM’s IPO plan as the company has not generated any revenue in its financial statement. Despite having given approval, there are no further details on the schedule.
· BRM plans to increase its equity through offering 20% of its shares to public and aim to raise up to US$300mn of fresh cash. This company controls Bumi Resources’ non coal assets such as Bumi Mauritania, Lemmington Investments, Komblo Bumi, Citra Palu Mineral and Multi Capital (which owned 24% stakes on Newmont Nusa Tenggara).
· The IPO plan will unlock value on Bumi’s non coal assets and would also be positive for BRM as it could utilize its assets to obtain financing for its projects.
· Currently BUMI is trading at 2011F PER of 11.6x and EV/EBITDA of 5.3x, Buy.
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