Top textile producer announces stock reverse to 1:20 ratio

The Jakarta Post ,  Jakarta   |  Fri, 02/22/2008 5:00 AM  |  Business

The country's largest textile producer, PT Polysindo Eka Perkasa, a member of the Texmaco Group, announced Thursday it will reverse its stake to 1:20 ratio in hoping to strengthen its liquidity.

"The purpose of changing the stock's nominal rate by reducing its number was to reverse the current circulated shares back to a realistic number, adjusted to the value of the company," Polysindo executive director Eka Perkasa V. Ravi Shankar said after the stakeholder's meeting on Thursday.

With the stock reverse, to be carried out in March, the company expects to convert a total of 247 billion shares in the market to only about 12 billion, with a total capital worth Rp 16 trillion.

After the stock reverse, the composition of the company's stock will be 850 million from 17 billion shares of the A series, 7.3 billion from 146.7 billion shares of the B series and 4.2 billion from 83.5 billion of the C series.

The A series shares' worth has increased from Rp 500 to Rp 10,000 per share, while the B series increased from Rp 50 to Rp and the C series from Rp 2 to Rp 40 per share.

A joint venture between ADM Capital of Hong Kong and Spinnaker Capital Group of London, Damiano BV, will remain as the biggest stakeholder with 59.83 percent of Polysindo's total stocks.

Corporate secretary H. Tunaryo told The Jakarta Post that the stock reversal would be an implementation of an agreement between Polysindo and its creditors on the company's debt settlement in 2005.

Currently the company has a remaining $1 billion in debt, he said, which would be converted into shares and released after the reversal.

After the stock release, the company will hold a remaining debt of $126 million, which will be paid through proceeds from bond issuance carried out after the stock reverse.

"PT Trimegah Sekuritas will take the odd lot stocks arising of this conversion. Trimegah is a standby buyer who will determine its share purchase by the highest closing rate," Ravi said.

An "odd lot" stock is a stock that less than a lot, 500 shares.

According to Ravi, the purchasing period of the odd lot stocks will be set for Feb. 25 to 29.

Polysindo Eka Perkasa Terbuka manufactures synthetic fibers and chemicals, and weaving, knitting and trading textiles.

Its products include polyester chips, polyester staple fibers, polyester filament yarn and fabrics, all marketed domestically and internationally.

The group operates two factories located in Karawang, West Java and Kendal, Central Java. (rff)

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