Philip Morris Said to Tap Banks for $1.5 Billion Indonesia Offer

Philip Morris International Inc. is working with banks including Credit Suisse Group AG and JPMorgan Chase & Co. on the sale of about $1.5 billion of stock in an Indonesian cigarette maker, people with knowledge of the matter said.

Philip Morris plans to offer some of its existing shares in PT Hanjaya Mandala Sampoerna later this year, the people said, asking not to be identified because the information is private. It owns 98.2 percent of Sampoerna, which needs to comply with Indonesian listing rules requiring companies to have at least a 7.5 percent free float by January next year.

Sampoerna has engaged investment banks to explore various options for fulfilling the requirement, including potential capital market transactions, it said in a June 29 statement. Elvira Lianita, Sampoerna’s head of regulatory affairs, and Iro Antoniadou, a spokeswoman for Philip Morris, declined to comment on Monday.

Indonesian brokerage PT Mandiri Sekuritas is also working on the offering, one of the people said. The Wall Street Journal reported the investment banks working on the sale earlier today, citing unidentified people.

Sampoerna has a free float of 1.82 percent and a market capitalization of $23.3 billion, according to data compiled by Bloomberg. Philip Morris bought a controlling stake in 2005 in the Surabaya-based company, which makes clove cigarettes.

The potential offering, which could be Indonesia’s largest this year, comes as the benchmark Jakarta stock index has fallen 5.9 percent in 2015 as corporate profits slow along with consumer demand in Southeast Asia’s largest economy. Sampoerna’s net income fell 5.9 percent last year to 10.2 trillion rupiah ($763 million).

Before it's here, it's on the Bloomberg Terminal. LEARN MORE