Indonesia’s MNC Group units seek $102m from rights issue

Visual from the MNC website

Two units of Indonesia conglomerate firm MNC Group, PT MNC Kapital Indonesia Tbk (BCAP) and its unit medium lenders Bank MNC Internasional Tbk (BABP), plan to raise funds from rights issue with total value Rp 1.50 trillion ($102.81 million), the company said, in a press statement.

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MNC Kapital chief executive Darma Putra said, MNC Kapital and its unit has received approval from its shareholders on Friday to launch a second rights issue. MNC Kapital will sell 551 million new shares to existing shareholders at Rp 1,500 apiece, expecting to raise Rp 827 billion ($56.64 million).

Both companies plan to use the funds to pay debts and to provide additional capital for its subsidiary. Bank MNC plans to boost its capital adequacy ratio to 19 per cent from now 13.87 per cent in June with the help of fresh funds raised in a planned rights issue.

Bank MNC Internasional, previously known as PT Bank ICB Bumiputera, plans to raise up to Rp 674.4 billion ($46.19 million) from selling new shares in November.

The lender is offering about 6.7 billion shares, equivalent to 28.57 per cent of its enlarged equity in a pre-emptive rights issuance, according to a filing with the local stock exchange.

Darma added, about Rp 240 billion of the proceeds from the rights issue of MNC Kapital would be used to buy the shares to be issued by its unit Bank MNC. The capital injection into the bank was needed to strengthen its financing capacity.

He added, 
MNC Kapital plans to use part of the proceeds from the rights issue to repay its debts worth about Rp 20 billion and strengthen the operations of its subsidiaries in a number of services including insurance, leasing, securities trading and multi-finance firm.

“By strengthening our subsidiaries, we plan to focus on developing our leasing and multi-financing services in order for them to be able to leverage the funds needed for their customers,” he said.

Darma stated, most of the conglomerate’s standby buyers were overseas investors, with some already expressing interest in the rights issue. In addition to the shares, the conglomerate will also issue series I warrants.

Each of the warrants would be given free with every share bought by MNC Kapital’s existing shareholders in the right issue, he said.

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Bank MNC is in the process merging with PT Bank Pundi Indonesia Tbk (BEKS), unit of private equity firm PT Recapital Advisory. Darma said, MNC Kapital was finalising the documentation on a merger agreement between the two banks.

MNC Kapital says, in a filing to the stock exchange, it has also set aside Rp 100 billion ($6.85 million) for capital reserve injection to Bank Pundii. The consolidation of the country’s banking industry has begun to take shape, with some small and mid-sized banks currently in merger talks.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.