Barito plans $1b rights issue to acquire Star Energy

IDX-listed diversified company PT Barito Pacific Tbk plans to launch a rights issue next year, hoping to raise US$1 billion in proceeds to be among others used to help finance the acquisition of controlling stake in geothermal developer Star Energy Group Holdings Pte Ltd.

Barito President Director Agus Salim Pangestu said at a public expose meeting on Wednesday that the company plans to hold extraordinary shareholders meeting on January 22 of next year to seek approval for the proposed rights issue.

He said Barito hopes to be able to conclude the acquisition of Star Energy following the launch of the rights issue, hopefully before end March 2018.

Barito plans to acquire 66.7 percent shares in Star Energy for US$755 million from Prajogo Pangestu, who is also the founding owner of Barito. The company has already made the initial payment for the acquisition, and plans to allocate 52 percent of the rights issue proceeds to make the remaining payment for the acquisition of Star Energy.

The remaining proceeds from the rights issue will be used to repay debts and to help finance its 2x1,000 MW PLTU Jawa 9 and 10 coal-fired power plant project. Barito through PT Barito Wahana Lestari owns 49 percent interest in the estimated Rp 46 trillion power plant project, while 51 percent is held by PT Indonesia Power, a subsidiary of state-owned electricity firm PT PLN.

The acquisition of Star Energy will facilitate Barito?s diversification into the renewables sector. Agus said that going forward, the company also plans to develop wind and solar power plant projects. (*)