Antam drops rights issue plan

State-owned gold and nickel producer PT Aneka Tambang Tbk (Antam) has finally said that it will not issue US$30 million worth of new shares (via rights issue) as previously planned, the Bisnis Indonesia newspaper reported in its Wednesday edition.

The decision was taken upon the request of the government, the majority shareholder of the Antam.

“If the majority shareholder doesn’t want the right issue, we would not implement the plan (right issue),” Antam president director D. Aditya Sumanagara told journalists at the Office of State Minister for State Enterprises in Jakarta on Tuesday.

The rights issue option, according to Aditya, was considered by the Antam management as a last alternative for the funding of Alumina Tayan bauxite project, which is very important for Antam.

State Minister for State Enterprises Laksamana Sukardi last week said it would be more efficient if Antam raises money from internal sources rather than rights issue to fund the project.

Aditya added that Antam has still other alternative funding sources, which include selling of non-productive assets, project’s reserve valuation and internal cash.

From the US$220 million needed for Alumina Tayan project, 70 percent of the funds through loans and 30 percent through equity, which will be equivalent to $70 million. (*)