UPDATE 2-Indonesia's Merdeka Battery set to price shares at top in $586 mln IPO

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By Yantoultra Ngui and Scott Murdoch

SINGAPORE, April 5 (Reuters) - Indonesian nickel firm PT Merdeka Battery Materials plans to price its shares at 795 rupiah each, at the top of the range for its initial public offering (IPO) to raise 8.75 trillion rupiah ($586.46 million), two sources with direct knowledge of the matter said.

As Indonesia steps up its efforts to become a major player in the electric vehicle industry and enjoys a flurry of IPOs, the pricing would make Merdeka Battery's IPO the second largest in Indonesia this year after its peer PT Trimegah Bangun Persada raised 10 trillion rupiah.

Merdeka did not immediately respond to a request for comment.

A unit of Merdeka Copper Gold, Merdeka Battery sold the shares in a price range of 780 rupiah to 795 rupiah a share, a term sheet dated March 29 seen by Reuters showed.

The IPO has attracted interest from sovereign wealth funds, insurance firms and long-only local and overseas investors, according to one of the two sources, who said the pricing would be at the top of the range.

Neither could be identified as the information is not officially public.

Merdeka Battery is scheduled to debut on the Indonesia's stock exchange on April 18, according to the term sheet, following the IPO debut of Trimegah Bangun Persada, also known as Harita Nickel, on April 12.

Indonesia is one of the world's hottest IPO markets this year as the government seeks to privatise some state-owned enterprises.

Some $828.1 million worth of share sales were issued in the first quarter, Refinitiv Eikon data showed, up from $202.3 million a year earlier.

Merdeka Battery plans to use its IPO proceeds for loan repayment, working capital and capital expenditure, the term sheet said.

UBS and Macquarie are the joint global coordinators of the IPO, and joint bookrunners with Bank of America and HSBC, while the domestic underwriters are Indo Premier Sekuritas and Trimegah Sekuritas Indonesia .

Other upcoming IPOs in Southeast Asia's largest economy this year include the planned listing of the upstream arm of state energy company Pertamina, Pertamina Hulu Energi, that could raise up to $2 billion, and state-owned fertiliser company Pupuk Kalimantan Timur that could raise $500 million.

($1 = 14,920.0000 rupiah) (Reporting by Yantoultra Ngui in Singapore and Scott Murdoch in Sydney; additional reporting by Fransiska Nangoy in Jakarta; editing by Jason Neely and Barbara Lewis)