Interview: Indika to focus on resources M&A, liability management

Indonesia’s Indika Energy will look at M&A opportunities in resources and watch the markets closely for opportunities to manage its liabilities and deleverage, according to CEO Arsjad Rasjid.

  • 03 Feb 2012
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Jakarta-based energy firm Indika Energy has ambitious plans to grow both organically and inorganically, snap up tasty M&A opportunities in natural resources, and keep an eye on capital markets for the purposes of liability management, according to chief executive officer (CEO) Arsjad Rasjid.

The company separates its integrated businesses into three broad sections: resources, services and infrastructure. It is embarking on an ambitious expansion programme across all its businesses, focused on organic growth while looking at acquisition opportunities for its resources business, said Rasjid in an interview with Asiamoney PLUS.

Indika acquired a 51% stake in coal logistics company Mitrabahtera Segara Sejati (MBSS) in April last year for IDR1.45 trillion (US$162.4 million). In 2009 it acquired coal mining contractor Petrosea for US$83.8 million.

The company is well known for savvy acquisitions. It was awarded best mid-cap company in Indonesia in 2010 by Asiamoney, in part for its rapidly successful integration of Petrosea.

It has equally proven adept at tapping capital markets. Its IDR3.1 trillion (US$347.2 million) initial public offering (IPO) in 2008 won Asiamoney’s Indonesia deal of that year. Its market capitalisation has climbed to around US$1.5 billion since then.

And the company is still considering both equity and bond markets if it can find the right opportunity to price an opportunistic deal.

“We see that windows are opening and closing very rapidly, that's why we have to be prepared at all times,” said Rasjid. “We’re always on the lookout to take advantage of [market] position and reduce our costs.”

The company has proven to be cost-conscious in managing its liabilities via capital markets. In addition to its IPO, it has issued almost US$500 million worth of bonds in the past three years and conducted a successful liability management last year for US$185 million worth of its 2012 notes.

“Deleveraging and liability management are always something that we look into,” said Rasjid. “For example, we had the 2012 bonds and we did a new bond issue because we could reduce our cost of capital. Our position is to be ready. We have to be ready at all times.”

But despite his confident expansion programme and bullish view on Indonesia since its return to investment grade rating, Rasjid believes that global macroeconomic headwinds pose a substantial threat.

“Indonesia is investment grade … the country is doing well but unfortunately the whole world is not,” he said. “So with that we also have a constraint.”

Rasjid notes that funding from European banks is likely to dry up which will mean the fight for access to liquidity among Asia’s corporates could become more competitive.

“Indonesian corporates should look into how each one of them can be prepared for that competition,” he said. “It all comes down, at the end of the day, to how good [we are at] what we do.”

Rasjid believes that transparency and good corporate governance are key aspects for corporates to focus on if they want to secure funding from banks in the future.

  • 03 Feb 2012

Bookrunners of International Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 Oct 2016
1 Citi 41,733.81 194 9.42%
2 HSBC 40,945.92 235 9.24%
3 JPMorgan 37,214.87 151 8.40%
4 Bank of America Merrill Lynch 29,284.07 123 6.61%
5 Deutsche Bank 20,416.10 78 4.61%

Bookrunners of LatAm Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 25 Oct 2016
1 JPMorgan 13,485.80 35 12.64%
2 Citi 11,728.10 31 10.99%
3 Bank of America Merrill Lynch 11,727.25 30 10.99%
4 HSBC 10,091.34 29 9.46%
5 Santander 9,784.51 27 9.17%

Bookrunners of CEEMEA International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 25 Oct 2016
1 Citi 15,985.59 61 11.10%
2 JPMorgan 14,992.78 59 10.41%
3 HSBC 11,482.63 54 7.98%
4 Barclays 8,704.42 31 6.05%
5 BNP Paribas 7,314.81 22 5.08%

EMEA M&A Revenue

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 02 May 2016
1 JPMorgan 195.08 50 10.55%
2 Goldman Sachs 162.26 37 8.77%
3 Morgan Stanley 141.22 46 7.64%
4 Bank of America Merrill Lynch 114.20 33 6.18%
5 Citi 95.36 35 5.16%

Bookrunners of Central and Eastern Europe: Loans

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 25 Oct 2016
1 UniCredit 3,966.12 27 13.01%
2 SG Corporate & Investment Banking 2,805.90 16 9.20%
3 ING 2,549.27 20 8.36%
4 Citi 2,526.98 15 8.29%
5 HSBC 1,663.71 16 5.46%

Bookrunners of India DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 26 Oct 2016
1 AXIS Bank 6,343.17 130 18.89%
2 HDFC Bank 3,833.38 102 11.41%
3 Trust Investment Advisors 3,461.85 150 10.31%
4 Standard Chartered Bank 2,372.20 33 7.06%
5 ICICI Bank 1,992.51 54 5.93%