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Bank KB Bukopin seeks to raise Rp 7.04t through rights issue
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ublicly listed Bank KB Bukopin is seeking to raise trillions of rupiah in a rights issue later this month as part of its efforts to develop its technological infrastructure and expand lending to the small business and retail sectors.
KB Bukopin will issue around 35.21 billion new Class B shares at Rp 200 (1.4 US cents) a piece with the aim of attracting Rp 7.04 trillion of additional capital. For every 200 million old shares, holders will receive preemptive rights for 215.55 million new shares.
According to the prospectus released on Wednesday, South Korea’s Kookmin Bank as the controlling shareholder has announced it will exercise its rights to buy 23.59 billion shares worth Rp 4.71 trillion.
“All funds raised from the [limited public offering], after deducting all related fees, will be used gradually, where the main allocation will be for investment and credit expansion,” KB Bukopin reported in the prospectus.
The rights issue comes a few months after Kookmin Bank and Indonesian conglomerate PT Bosowa Corporindo, once the controlling shareholder of KB Bukopin, reached an agreement to end a legal dispute over how to solve liquidity issues of KB Bukopin.
Read also: KB Kookmin Bank, Bosowa Corporindo end legal battle over KB Bukopin
KB Bukopin, which has a market capitalization of around Rp 12 trillion, plans to use 84 percent of the expected additional funds to expand its lending to the retail, small and medium enterprise (SME), commercial and Indonesia-South Korea business segments.
“The Indonesia-South Korea business link is a unique value proposition of the company,” the bank stated. “The company has access to companies in South Korea that develop their businesses in Indonesia.”
The remaining 16 percent of the funds will be for developing the bank’s technological infrastructure and to rebrand the company. The bank wants to develop what it calls a “next-generation banking system” and digital banking within five years.
KB Bukopin’s shares, traded on the local bourse under the ticker symbol BBKP, were down 6.8 percent to Rp 384 a piece on Wednesday afternoon from the previous close.
