Indonesia's Sampoerna plans $1.94 bln rights issue to meet free-float rule
* Sampoerna selling shares at 63,000-99,000 rupiah each
* Sale will be biggest in Indonesia in 7 years
* Philip Morris had aimed to raise at least $1 bln by cutting stake (Adds milestones and background)
By Eveline Danubrata
JAKARTA, Aug 13 (Reuters) - Philip Morris-owned Indonesia cigarette maker Sampoerna is planning a rights issue that will raise nearly $2 billion to meet stock exchange free-float rules, in what will be the Southeast Asian nation's biggest share sale in seven years.
Indonesia's biggest listed cigarette maker is selling as many as 269.7 million shares in a range of 63,000-99,000 rupiah each for a total of as much as 26.7 trillion rupiah ($1.94 billion), the company said in a stock exchange filing late on Wednesday.
Sources previously said that Philip Morris International Inc was planning to sell down some of its 98.18 percent stake in PT Hanjaya Mandala Sampoerna Tbk and raise at least $1 billion.
The share offering comes a time when Indonesia's economic growth is at its weakest in six years and tougher rules on television advertising are weighing on the cigarette industry.
However, Sampoerna's nearly 35 percent market share makes it attractive to potential investors, bankers have said. The company sells some of the most popular cigarette brands, including Dji Sam Soe and U Mild, in Indonesia, a country where smoking remains widespread. Sampoerna competes with PT Gudang Garam Tbk and Djarum Group in Indonesia.
The Indonesian stock exchange requires all listed firms to have a free float of at least 7.5 percent by Jan. 30, 2016. Sampoerna can meet the rule if Philip Morris renounces its rights.
The share sale would be the biggest in Indonesia since a $4.4 billion deal by PT Bakrie & Brothers Tbk in April 2008. It would also be the largest in Southeast Asia since Singapore lender Oversea-Chinese Banking Corp raised $2.6 billion from shareholders to bolster its capital last September.
Credit Suisse, Citigroup, Goldman Sachs, JPMorgan and Mandiri Sekuritas are working on the Sampoerna deal, IFR, a Thomson Reuters publication, has said. ($1 = 13,735.00 rupiah) (Additional reporting by Elzio Baretto in Hong Kong; Reporting by Eveline Danubrata; Editing by Muralikumar Anantharaman)
