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Adhi Karya, Antam seeking approval to launch rights issues

State-run construction company Adhi Karya and diversified miner Aneka Tambang (Antam) are moving closer to realizing their rights issue plans — both slated for next month — as part of the government’s state-run capital (PMN) program to finance strategic infrastructure projects

Anggi M. Lubis (The Jakarta Post)
Jakarta
Fri, September 18, 2015

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Adhi Karya, Antam seeking approval to launch rights issues

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tate-run construction company Adhi Karya and diversified miner Aneka Tambang (Antam) are moving closer to realizing their rights issue plans '€” both slated for next month '€” as part of the government'€™s state-run capital (PMN) program to finance strategic infrastructure projects.

Adhi Karya, which had postponed its equity issuance scheduled for this month, because of volatility in the stock market, announced through a prospectus published on Thursday that it would seek approval for a rights issue through an extraordinary shareholders meeting to be held next Tuesday.

Meanwhile, Antam'€™s shareholders meeting is scheduled for Oct. 7, according to the company'€™s prospectus published recently. Antam will start its preemptive rights trading on Oct. 22, lasting until Oct. 30, while Adhi'€™s preemptive rights trading will run from Oct. 7 to Oct. 13.

Adhi is looking to raise Rp 2.74 trillion (US$190.38 million) from the rights issue, whereas Antam is looking for Rp 5.31 trillion of fresh funds.

Out of the total targeted funds, the government will purchase shares worth Rp 1.4 trillion from Adhi and buy Rp 3.5 trillion of new shares from Antam, in line with the PMN budget allocated for the two companies.

The builder'€™s rights issue share price is set at Rp 1,560, compared to its closing price on Thursday of Rp 2,030 per share. Meanwhile, the miner has set its price at between Rp 371 and Rp 535 per share, while its shares hovered at Rp 483 on Tuesday.

As stated in its prospectus, Adhi will use proceeds from the rights issue to finance its light-rail transit (LRT) project, which is expected to ease congestion in Greater Jakarta and to absorb Rp 9.9 trillion of funds in total. '€œThe remainder will be financed by bank loans,'€ the company said.

Antam, meanwhile, will use the funds for a ferronickel smelter in Halmahera, North Maluku, which is expected to cost about $1.6 billion and will have the capacity to process 40,000 tons of ferronickel in nickel (TNi) a year.

Thirty-seven state-owned enterprises under the State-Owned Enterprises (SOE) Ministry have been scheduled to receive a combined capital injection of Rp 31.52 trillion.

The companies to receive PMN are operating in the government'€™s prioritized sectors, such as infrastructure and companies moving to downstream business.

Adhi Karya and Antam are among the three listed state-run companies that are allocated to receive the government'€™s state capital injection this year, with the other being construction company Waskita Karya.

Waskita issued its new shares in June and successfully raised Rp 5.3 trillion from the equity issuance. Its portion of the government'€™s injection budget this year was Rp 3.5 trillion.

Bahana Securities, Mandiri Sekuritas and Danareksa Sekuritas will be underwriters for Adhi'€™s corporate issuance. Antam, however, has yet to appoint its underwriters.

'€œWe don'€™t yet have underwriters at the moment, but we are not closing the chances for potential underwriters to support us in the transaction,'€ the company said in a statement published on Thursday.

Antam said that when it appointed an underwriter for the issue it would be announced at least two days before the shareholders meeting.

The company added that it was upbeat that investors would positively welcome the share issue.

'€œIf our shares go unabsorbed, we are confident of being able to cover our funding needs from internal cash or third-party loans,'€ it concluded.

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