United Tractors plans $300 million rights issue

Publicly listed heavy equipment producer and coal mining contractor PT United Tractors (UT) plans to issue rights shares in September this year to raise funds for loan refinancing and expansion, Kontan reported on Wednesday.

The company?s corporate secretary Sara K. Loebis said in Jakarta on Tuesday that the documents for the rights issue were submitted to the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) last week.

He said that UT would hold an extra-ordinary shareholders meeting next month to seek approval for the rights issue plan. But he refused to unveil the amount of funds to be raised from the rights issue.

However, an executive of a security company said that UT would raise at least Rp 2.76 trillion or about $300 million from the issuance of the rights shares.

PT United Tractor, the country?s main distributor of heavy equipment, has also been engaged in coal mining activities during the past several years through its subsidiary PT Pamapersada Nusantara.

In January 2007, UT through its mining contractor subsidiary PT Pamapersada Nusantara acquired South Kalimantan coal miner PT Dasa Jasa Ekatama, which produced 3.56 million tons of coal in 2007.

In January 2008, UT acquired coal miner PT Tuah Turangga Agung (TTA) for US$115.6 million. The mine is expected to start production at 200,000 tons this year and ramp up the output to 1 million tons in 2009 and 3 million tons in 2010. (*)