Philip Morris plans to sell more than $1 bn worth of shares in Indonesian subsidiary
06 Jul 2015
US tobacco giant Philip Morris International Inc plans to sell more than $1 billion worth of shares in its Indonesian operation, the company said in a statement.
Philip Morris, the maker of Marlboro brand of cigarettes outside the US, has hired investment banks including Goldman Sachs, Credit Suisse, J P Morgan and local firm Mandiri Sekuritas for the sale of shares in PT HM Sampoerna Tbk, The Wall Street Journal today reported, citing people familiar with the matter.
Sampoerna Tbk has a market cap of about $23.6 billion and the New York-based company currently holds a majority 98.2-per cent stake.
The sale will allow Philip Morris to comply with a new Indonesia stock exchange regulation requiring all Indonesia-listed companies to have at least 7.5 per cent of their shares in free float, the report added.
''On January 30, 2014, IDX introduced a regulation requiring all listed public companies to have at least 7.5% of their total paid up capital owned by the public by January 30, 2016,'' Philip Morris said in a staement.
HM Sampoerna is Indonesia's largest cigarette manufacturer and among the largest Indonesian companies listed on the IDX in terms of market capitalisation.
Philip Morris, a subsidiary of the Altria Group until 2008, had acquired HM Sampoerna in 2005 for $5.2 billion.
With its 38 manufacturing facilities, HM Sampoerna controls about 34 per cent of Indonesia's tobacco market, according to Nielsen Retail Audit Results for 2013.
Some of its most popular cigarette brands include Sampoerna Hijau, Sampoerna A Mild, and Dji Sam Soe, Sampoerna Kretek and U Mild Kretek cigarettes.
The Kretek cigarettes are made from a mixture of tobacco and cloves, and account for about 92 per cent of the cigarette market in Indonesia.
