UNTR plans to raise Rp 6t from rights issue

PT United Tractors Tbk (UT) plans to raise up to Rp 6 trillion (US$696 million) through rights issue which is expected to be launched later this year, the company?s senior executive said.

The company?s vice president Paulus Bambang Widjanarko said in Jakarta on Friday that proceeds from the issuance of the rights shares would be used to finance expansion of the company?s coal mining business.

Between 45 percent and 55 percent of that funds to be raised from the rights issue would be used to acquire a new mining company, he said, adding that the other 20 percent of the funds would be used to increase working capital.

Paulus did not provide details about the acquisition plan, saying only due diligence on the acquisition target is in progress.

Aside from operating as a heavy equipment manufacturer and distributor, the company is also involved in coal mining business both as contractor or operator. In 2010, UT?s total revenue rose by 27.63 percent to Rp 37.32 trillion.

The company?s coal business contributed about Rp 3.1 trillion in the total revenue. The company produced 77.9 million tonnes of coal last year. During the January to March period, the coal production reached 12.7 million tonnes. (*)