Astra International, one of Indonesia’s largest and most diversified conglomerate groups, is raising Rp 10 trillion ($768 million) through three rights issues conducted by its publicly listed units – PT Astra Agro Lestari Tbk (AALI), PT Bank Permata Tbk (BNLI), and PT Acset Indonusa Tbk (ACST).
Construction firm Acset Indonusa is targeting Rp 600 billion ($45.7 million), Astra Agro Rp 4 trillion ($304 million), while Bank Permata is aiming for Rp 5.5 trillion ($418 million). The funds will be used to strengthen capital structure, routine operations and expansion.
On Tuesday, Acset announced it had received shareholder approval to release 300 million units of new shares with nominal value of Rp 100 each. Acting as the standby buyer is PT Karya Supra Perkasa, a subsidiary of Astra’s PT United Tractors Tbk (UNTR), who also owns 50.1 per cent of Acset’s shares.
Vice president director of Acset Indonusa Jeffery G Chandrawijaya said, the firm had acquired approval from shareholders in the annual general meeting on Tuesday. The rights issue proceeds will be used for capital and operational expenditures, funding the firm’s new and ongoing construction projects.
“The price of each share is still being calculated. We are also still waiting for an approval from the Indonesian Financial Services Authority (OJK), which hopefully will be issued by June,” said Chandrawijaya.
Acset’s new contracts in the first quarter of 2016 have reached Rp 2.4 trillion or about 68.5 per cent from the total target of Rp 3.5 trillion. The largest portion of the new contracts comes from the Gedung Indonesia I project, which has a total value of Rp 1.8 trillion.
Meanwhile, palm oil plantation company Astra Agro had also acquired approval for its preemptive rights issue last week.
Astra Agro intends to issue a maximum of 450 million units of new shares at a price range that will be set next month. The funds will be used to reduce liabilities, strengthen its balance sheet and increase overal capital available for ongoing development.
Last month, Bank Permata announced plans to conduct a rights issue worth up to Rp 5.5 trillion to support its expansion and comply with Basel III regulations.
The bank’s two major shareholders, Standard Chartered and Astra International – each holds 44.6 per cent stake in Bank Permata – have committed to absorb the shares released through the rights issue.
With the rights issue, the bank would have total capital of around Rp 23 trillion to Rp 24 trillion and maintain capital adequacy ration (CAR) at between 17 and 18 per cent this year.
Astra International was founded in 1957 by brothers Tjia Kian Tie and William Soeryadjaya. Today, the group has become Indonesia’s largest automotive distributor and producer, partnering with Japanese automakers such as Toyota, Daihatsu, and Isuzu.
The group has grown into six core businesses – automotive, financial services, heavy equipment, agribusiness, information technology and infrastructure.
For the full year 2015, Astra International reported revenue of Rp 184.1 trillion or down 9 per cent from Rp 201.7 trillion in the same period 2014 – the first time in five years that the company’s revenue contracted. In line with the sliding revenue, the company’s net income fell 25 per cent to Rp 14.4 trillion from last year’s Rp 19.1 trillion.
Falling domestic consumption as well as plummeting commodity prices are the main reasons behind the weak performance.