Saratoga News

RTRS-UPDATE 1-INTERVIEW

PT Saratoga Investama Sedaya, one of Indonesia's top private equity firms, expects to raise up to $500 million in new capital next year by targeting newly-minted Indian and Chinese investors as it eyes opportunities in the consumer, infrastructure and shipping sectors.

Saratoga, which manages an estimated $2.5 billion in assets, is betting that infrastructure and transportation investments will boom as the Southeast Asian nation tries to link disparate economies among its numerous islands, while rising incomes will boost consumer spending.

The young democracy vowed last year to focus on developing $140 billion in desperately needed infrastructure projects such as roads, rails, and ports, with the help of private investors.

A long-awaited new land acquisition law, due to be submitted to parliament before the end of this year, is expected to boost transport, power and port development by clarifying the land procurement process.

"Some infrastructure stories were not successful, including toll roads, due to the land issue still to be resolved," Sandiaga Uno, Saratoga's managing director, said in an interview with Reuters.

"But I'm still optimistic that the government will make a big push for the draft of land bill by the end of the year."

FROM DISTRESS TO PROFIT

Saratoga's business model is built on turning distressed assets into profitable ones. Years ago, it acquired PT Adaro Indonesia, helped to make it profitable, and eventually listed its parent company Adaro Energy in 2008, raising $1.3 billion -- the biggest Indonesian IPO in history.

Saratoga aims to raise up to $500 million through fund-raising with investors next year, more than tripling its previous $150 million fund-raising, Uno said.

"We're looking at the new wealth in India and China as potential source of funds," said Uno.

Indonesia's coveted natural resources assets are still on Saratoga's acquisition radar, despite losing a battle to acquire a 37 percent stake in Indonesia's oil services firm PT Elnusa to PT Benakat Petroleum earlier this year.

"The potential is still there but coal is a bit crowded now," Uno said, adding that metals, including nickel, gold and iron ore are also one of the sectors the firm is looking for deals.

For now, it's mostly infrastructure projects aimed at easing the country's congestion, and transportation firms benefitting from higher incomes and increased mobility, commanding Saratoga's attention.

"We're looking at what would support the connectivity because we have 17,000 islands in Indonesia," said Uno. "We need to develop transportation." (Editing by Joseph Chaney)

Source: reuters