Philip Morris Said to Raise $1.4 Billion in Indonesian Offering

  • Sampoerna to price shares at 77,000 rupiah, top end of range
  • Share sale is Indonesia's biggest secondary offer in 2 years

Philip Morris International Inc., the world’s largest listed tobacco company, is set to raise $1.4 billion after its Indonesian subsidiary priced shares at the top end of a marketed range, people with knowledge of the matter said.

The New York-based company’s unit PT Hanjaya Mandala Sampoerna priced shares at 77,000 rupiah each, the people said, asking not to be named as the information is not public yet. The company had earlier marketed the rights offer at 65,000 rupiah to 77,000 rupiah per share, after earlier gauging demand at a range of 63,000 rupiah to 99,000 rupiah.

The capital raising to cut its stake in the Indonesian unit comes as foreign investors sell Southeast Asian stocks at the fastest pace on record. Overseas funds unloaded a net $5.1 billion of Indonesian, Thai and Philippine shares in the third quarter as the MSCI Southeast Asia index sank 20 percent. Philip Morris’ share sale is poised to be Indonesia’s largest secondary share sale in more than two years, data compiled by Bloomberg shows.

Sampoerna had offered 269.7 million shares in a 4-for-65 rights issue, and Philip Morris, which currently owns 98.18 percent of the Indonesian unit , offered 264.2 million shares from its entitlement to other investors through a placement, according to terms of the deal previously obtained by Bloomberg. The transaction will help Sampoerna, which has a market value of 340 trillion rupiah ($23 billion), meet Indonesian listing rules requiring companies to have at least a 7.5 percent free float by January next year.

Sampoerna rose 2 percent to 77,500 rupiah as of 10:26 a.m. in Jakarta trading, the biggest gain in more than two months.

Goldman Sachs Group Inc and JPMorgan Chase & Co. are joint global coordinators of the offering, while Citigroup Inc., Credit Suisse Group AG and PT Mandiri Sekuritas are joint bookrunners.

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