Antam set for Rp 5.3t rights issue
Saturday, August 29 2015 - 02:57 AM WIB
Antam said the company would issue 14.12 billion new shares, which would be offered to existing shareholders during the period October 22-28. The company will have to gain approval for the rights issue from shareholders in a general shareholders meeting to be held on October 7.
The shares will be priced at between Rp 371 and Rp 535 each, meaning that the company will be able to reap a maximum of Rp 5.3 trillion if the shares are fully absorbed at the premium price.
The government, as the majority shareholder, has allocated Rp 3.5 trillion to purchase the new shares, as part of its capital injection program for the country?s state-owned companies.
?The proceeds from the rights issue will be used to finance the East Halmahera project, which includes constructing the processing and purifying facilities as well as other supporting infrastructure,? the company said in its prospectus.
Antam previously proposed a Rp 7 trillion capital injection from the government to finance three mega projects - Mempawah?s SGA refinery; a ferronickel smelter in Halmahera, North Maluku, and an anode slime project - but House of Representatives Commission VI had agreed to only Rp 3.5 trillion.
Antam corporate secretary Tri Hartanto told The Jakarta Post that as the figure approved by the House was far below the company?s expectations, Antam had decided to focus on a project that was already run-fling and would seek other financing sources for the other two projects.
The Halmahera project, which will cost about $1.6 billion, will have the capacity to process 40,000 tons of ferronickel in nickel (TNi) a year.
In 2014, Antam commenced commissioning of the jetty; conveyor belt and refining facilities of the project.
Overall engineering, procurement and construction (EPC) progress at the Halmahera project has? reached 82.7 percent, according to the company?s annual report that was published in March.
Also last year, Antam signed a $160 million investment credit facility with Indonesia Eximbank, part of the funds of which will be used in the project.
The firm has already secured $650 million in syndicated loans from four banks: the country?s biggest lender by assets, PT Bank Mandiri (BMRI); PT Bank Rakyat Indonesia (BBRI); and foreign lenders Standard Chartered Bank and Sumitomo Mitsui Banking Corporation Ltd.
The miner secured approval for a tax allowance facility for the project last year, which will save Rp 64.3 billion per annum for six years of operation.
Antam shares have fallen by 54 percent so far this year due partly to the drop in nickel and gold prices. The stock price slipped by 6.48 percent on a daily basis to Rp 491 on Friday amid the global market rout.
Antam saw its revenues nearly double from Rp 3.99 trillion in the first half of last year to Rp 7.85 billion this year, as a result of the company?s efforts in countering declining gold prices by boosting its production from around 4 tons last year to 10 tons this year, Tri said. (*)