ESSA?s subsidiary to build ammonia plant
Friday, December 7 2012 - 01:53 AM WIB
ESSA did not disclose details of the expansion projects but the company earlier said that the company would build an ammonia plant with a capacity of 700,000 tons a year.
The ammonia plant will be built and operated by its subsidiary PT Panca Amara Utama, which would need about $750 million to finance the construction of the plant. About $250 million of the total investment needs would be financed by the company?s internal funds while the other $500 million to be financed by external funds including loans.
International Finance Corporation would provide loan worth $100 million for the ammonia plant project. IFC will also help raise syndicated loans worth $400 million from a number of banks.
ESSA plans to issue 100 million new shares through a non-preemptive rights share offering to raise funds for the expansion projects.
ESSA will sell the new shares, which account for about 9 percent of the enlarged shares, to a strategic investor through private placement for Rp 2,775 per share. With this price, the company expects to raise Rp 277.5 billion (about US$28 million) from the new share offering.
The company, however, still declined to name the strategic investor which will buy the shares. ?We are still discussing with the investor. We cannot reveal it yet,? ESSA?s corporate secretary Khanisk Laroya said.
The sales of the new shares would dilute the ownership of the existing shareholders. The ownership of Trinugraha Akraya Sejahtera will be reduced to 30 percent from 33 percent at present, Ramaduta Teltaka to 20 percent from 22 percent, Accion Diversified Strategy Fund to 18.8 percent from 20 percent and those of the public to 22.73 percent from 25 percent.
Laroya said that the sales of the new shares would improve the company?s capital structure. Paid-up capital will for example increase to $49.36 million from $21.46 million before the private placement.
The company is scheduled to hold an extraordinary shareholders meeting on Dec. 20 to ask shareholders? approval for the non-preemptive rights share offering. (*)