Indonesia state-controlled pharmaceutical company PT Kimia Farma Tbk (KAEF) is planning to raise Rp2 trillion ($146.04 million) through a rights issue in the fourth quarter of 2016.
The company will issue new shares amounting to 1.1 billion units, or 20 per cent of its paid-up capital, at Rp1,000 apiece. The proceeds will be used to fund its expansion next year, President Director Rusdi Rosman, said.
He noted the plan is pending the approval from the government and the House of Representatives (DPR).
Rusdi said, the rights issue proceeds will be used to part-fund the company’s capital expenditure plan for next year, which is set at Rp3 trillion.
The firm is planning to develop three new plants. The company will also use its cash flows and bank loans, including from Citibank, to fund the expansion plan.
Kimia Farma will expand the capacity of its plant in Banjaran Industrial Estate, West Java to 4 billion tablets from 1.2 billion tablets per annum at present. The company will also develop the second phase of salt plant to be used by pharmaceutical industries, which will boost the plant’s capacity to 4,000 tonne per annum, from 2,000 tonne at present.
Kimia Farma, PT Garam and PT Bio Farma also set a joint venture to produce salt to be used by pharmaceutical sector, in which Kimia Farma holds majority stake. The JV will set up a plant with production capacity of 300,000 tons per annum.
In addition, the company is also planning to build new plant to produce pharmaceutical raw materials in Cikarang, Bekasi, West Java in cooperation with a foreign partner.
Earlier, the company tied up with South Korea’s Genexine Biologics to develop a plant in Bekasi, West Java. The JV with the South Korean firm will produce generic drugs and is expected to go online in 2018.
The company expects its revenues to rise to Rp5.5 trillion in 2016, from projected Rp5 trillion this year. It expects net profit to increase by 14 per cent next year from estimated Rp250 billion this year.