Indonesia’s Top Drugmaker Kalbe Farma Weighs Food Unit IPO

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PT Kalbe Farma, Indonesia’s biggest drugmaker by market value, is considering an initial public offering for its nutritional food unit PT Sanghiang Perkasa, which could raise about $500 million, according to people with knowledge of the matter.

Kalbe Farma, whose antacid drug Promag is a household name in Indonesia, has picked advisers to help with the planned first-time share sale of the unit, the people said. The company aims to list Sanghiang, also known as Kalbe Nutritionals, on the Jakarta stock exchange as soon as this year, said the people, who asked not to be named as the process is private.

At $500 million, Sanghiang’s potential share sale would be Indonesia’s biggest since PT Garuda Indonesia Persero’s IPO in 2011, according to data compiled by Bloomberg. The planned offering could also give a boost to Southeast Asia’s biggest economy, which has hosted only $285 million worth of IPOs so far this year, heading for the lowest volume since 2009.

Deliberations on Sanghiang’s share sale are ongoing and details of the offering could still change, the people said.

Kalbe Farma is exploring business expansion through the capital market and bank financing for all divisions, its President Director Vidjongtius said in response to a Bloomberg News query. The company has no specific plans at this time for an IPO of the food unit, he said.

Shares of Kalbe Farma were little changed at 1,600 rupiah as of 3:14 p.m. in Jakarta, giving the company a market value of about $5.1 billion.

Sanghiang develops healthy food and drink products such as nutrient-enhanced snack foods, as well as specific lines aimed at groups including children, expectant and breastfeeding mothers and the elderly, according to their website. Diabetasol, a powedered nutrient-enhanced drink for diabetics, has about a 90% share of its category in the domestic market, according to Kalbe Farma’s latest presentation. The nutritionals division contributed about 28% of Kalbe Farma’s revenue in the current year to the end of June.

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