Sunday, November 21, 2010

Kertas Basuki Rachmat downsize rights issue

PT Kertas Basuki Rachmat Indonesia Tbk, paper producer company, reduced the value of its rights issue merely due to the cost cutting of such corporate action and the additional cost to pay any companies assisting the implementation of the rights issue.
Formerly, the company expects to derive IDR604.29 billion from such corporate action, yet, it then was reduced to IDR596.85 billion. Such difference was clearly seen if we compared the company’s initial prospectus issued in October and the current prospectus released this week.
The reduction was in the post of working capital, from IDR9.41 billion to IDR1.97 billion.The majority fresh funds derived from such corporate action shall be used to settle Basuki Rachmat’s debt to Quest Corporation as much as IDR544.87 billion as it also plans to use it to pay the restructuring cost over its debt to Quest, amounting IDR50 billion.
In the previous prospectus, the proportion of the old shareholders may be diluted into 75.61% at the most supposed they do not execute the pre-emptive rights issue and warrants also released by the company.
Nevertheless, in the latest prospectus, the company did not display the possibility of reduction of stocks by the shareholders after such rights issue.
Kertas Basuki has appointed PT Henan Putihrai as the standby buyer. In such corporate action, the company issued 5.98 billion C-series new shares with the nominal value of IDR100 and offering price of IDR101 per share. The new stock value is nearly 75.61% of the company’s total share.
Basuki Rachmat also issued 199.43 million warrants of II series, valuing IDR20.94 billion with nominal value of IDR100 and IDR105 of offering price.

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