(April 10): Indonesia’s richest man has begun selling small stakes in his listed companies as tighter ownership rules push firms to increase shares available to public investors.
Billionaire Prajogo Pangestu sold a 0.56% stake in coal and mining holding PT Petrindo Jaya Kreasi to boost the company’s free float, according to a stock exchange filing late Thursday. Pangestu-affiliated Green Era Energy Pte Ltd this week also sold a fraction of its stake in his PT Barito Renewables Energy.
Indonesia is racing to avert a downgrade to frontier market status by MSCI Inc that could trigger foreign outflows. To address concerns about ownership transparency, the stock exchange has proposed tighter rules to require 15% free float within three years. Barito Renewables, along with the Widjaja family’s PT Dian Swastatika Sentosa was among nine firms the regulator singled out for concentrated ownership of more than 95%, spurring selloffs.
“Pangestu might only want to follow the rules,” said Christopher Andre Benas, head of research at PT BCA Sekuritas. “We hope that other tycoons to follow suit.”
The sale of Petrindo shares is more of a signal to the market, as the company was already compliant with a 15.9% free float as of December, according to Indonesia Stock Exchange data published in February. After the transaction, Pangestu held an 82.86% stake. The stock gained as much as 11% on Friday.
A Barito spokesperson referred to the disclosure and declined to comment further.
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The core of the problem is a stock market that has long been dominated by family-owned conglomerates that operate dozens of listed and private entities spanning industries from mining to petrochemicals.
The stricter requirements have also caused telecommunications infrastructure builder PT Solusi Tunas Pratama — controlled by Djarum Group heirs Martin Hartono and Victor Hartono — to announce plans to delist rather than trying to meet the new free float threshold.
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