The company plans to raise up to Rp 675.96 billion (US$46.76 million) from the issuance of 1.23 billion new shares at an exercise price of Rp 550 apiece, according to its prospectus on Friday. Around 90 percent of the proceeds will be allocated to the company’s subsidiary, PT Indomobil Multi Jasa, while the rest will be used for Indomobil Sukses’ working capital.

“Gallant Venture Ltd as the majority shareholder of the company declared not to exercise and will transfer its entire preemptive rights in the rights issue to PT Bina Raya Perkasa,” the company said in a statement on Friday. 

“The consideration that led Gallant Venture to divert its rights is that the company has not performed well lately, so Gallant Venture as a public company in Singapore does not intend to exercise its rights during this rights issue,” the company explained in a statement on July 2. 

Gallant Venture currently owns 71.49 percent of the company’s shares, making it the largest shareholder of the company. Upon the completion of the rights issue, Gallant Venture’s ownership over Indomobil Sukses will have diluted by 30.77 percent, resulting in a 49.49 percent of ownership of the company.

Bina Raya Perkasa, owned by tycoon Pieter Tanuri, will become the second-biggest owner with 22 percent of the company’s total shares, assuming that the other two shareholder groups, PT Tritunggal Intipermata and the public, both exercise their rights.

The coronavirus outbreak has hit Indonesia’s automotive industry hard as shown in the country’s national car sales. Car wholesales nosedived in April and hit rock bottom in May with a more than 95 percent annual drop as the pandemic hit demand.

The figure rebounded more than threefold in June to 12,623 units from a record low 3,551 units in May despite still almost 79 percent lower than the same period last year, according to Association of Indonesian Automotive Manufacturers (Gaikindo) data compiled by diversified conglomerate PT Astra International.

In a statement published on the Indonesia Stock Exchange (IDX) on June 12, Indomobil reported that the COVID-19 pandemic had affected its business.

The company booked a net loss of Rp 164.5 billion in this year’s first quarter, down from a net profit of Rp 630.99 billion booked during the same period last year.

Its net revenue decreased 6.82 percent to Rp 4.46 trillion from Rp 4.79 trillion, as revenues from the cars, trucks and heavy equipment segments decreased. Meanwhile, its cost of revenue decreased 8.37 percent to Rp 3.55 trillion as of March 31. 

Going forward, the company estimated that its automotive sales would decline by around 70 percent yoy in the second quarter after having fallen 22.2 percent in the first quarter, the company reported.

The company’s stocks, traded at the IDX under the code IMAS, had dropped 2.96 percent as of 2:30 p.m. Western Indonesia Time on Monday to Rp 655 apiece as the benchmark, the Jakarta Composite Index (JCI), gained 0.39 percent. The stocks have lost more than 73 percent of their value in the last year.

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