The tycoon sold a 0.56% stake in coal and mining firm Petrindo Jaya Kreasi to increase its free float, according to a stock exchange filing released last Thursday and cited by Bloomberg. The sale reduced his holding at the company to 82.86%.
Green Era Energy, a company linked to Pangestu, also sold a 0.2% stake in Barito Renewables Energy earlier last week, according to financial data platform IDNFinancials.
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Indonesian billionaire Prajogo Pangestu, founder of Barito Pacific Group. Photo from the company’s website |
The sales come as regulators push ahead with stock market reforms after index provider MSCI warned in late January that Indonesia could be downgraded to frontier market status over concerns about a lack of transparency around stock ownership and trading.
A key change requires listed firms to double their minimum free float, or shares available for public trading, to 15% from 7.5% previously. The Indonesia Stock Exchange has given companies up to three years to comply. Other measures include greater disclosure of shareholder information and the publishing of a list of stocks with high shareholder concentrations, as reported by Reuters.
The free float requirement was among the issues highlighted by MSCI, which said investors have raised “fundamental investability issues” arising from opaque ownership structures, and “concerns about possible coordinated trading behavior that undermines proper price formation,” as quoted by Nikkei Asia.
Data from the Indonesia Stock Exchange shows that 267 listed firms currently fall short of the 15% free float requirement, with just 49 of them making up about 90% of total market capitalization.
“Pangestu might only want to follow the rules,” said Christopher Andre Benas, head of research at brokerage BCA Sekuritas, as quoted by Bloomberg. “We hope that other tycoons to follow suit.”
The billionaire’s divestment in Petrindo is seen largely as a signal to the market, as the company had already met the requirement with a free float of 15.9% as of December, based on stock exchange data published in February.
Pangestu, whose wealth stems from his stake in petrochemical giant Barito Pacific and listed units spanning geothermal, renewable energy, coal and other resources, was ranked the country’s richest billionaire by Forbes last December with a net worth of $39.8 billion.
His fortune, however, fell sharply earlier this year following a stock market sell-off triggered by the MSCI warning.
According to the magazine’s real-time data, his net worth was estimated at $27.4 billion as of April 14.