The firm is expected to conduct a reverse stock split at a 10-to-1 ratio, meaning that for every 10 shares of stock at the original stock price of Rp 100 will become one share of stock worth Rp 1,000.

“This is the first step in our financial restructuring to reduce the company’s financial burden. It is also a way to better communicate with our creditors,” the firm’s director Balakrishnan Chandrasekaran said on Tuesday.

Andi W. Setianto, another director of UNSP, explained that a reverse stock split did not change the market value of the company nor its market capitalization. Instead, the stock split reduces the number of outstanding shares and increases earnings per share.

With the reverse stock split, the company hopes it can get a reasonable stock price. Since August 2013, the company’s stock price has stood at Rp 50, he said.

“This action needs the approval of our shareholders. Thus, we will hold an extraordinary shareholders’ meeting on Oct. 31,” Andi said.

Currently, UNSP has 16,795 public shareholders, 83 percent of whom are locals and 17 percent of whom are foreigners. (win)

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