Red Dragon Group Pte Ltd claimed the proposal of PT Central Pro teinaprima Tbk (CP Prima) rights issue will dilute the corporate secured bond value.
Red Dragon issued secured convertible bonds worth US$200 million with 2 percent coupon maturing by 2010.
The secured convertible bonds are the CP Prima stocks owned by Red Dragon, PT Surya Hidup Satwa and other affiliated company comprising from the 70 percent of CP Prima floating stocks in November 2008.
Founder of PT Independent Research & Advisory Indonesia (IRAI) Lin Che Wei explained Red Dragon bonds default was due to the fact that the collateral value fell under the collateral coverage ratio following the decline of CP Prima stock price at market. IRRAI is the finance advisor of Red Dragon bond holders.
"There is agreement on the issuance of Red Dragon bonds. The Red Dragon and its affiliates should meet the agreed ratio and provide additional collateral when the ratio goes lower than the agreement," he said last week.
Monday, March 30, 2009
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