Danamon to raise fund US$300 million

PT Bank Danamon plans to raise fund of around US$300 million– US$500 million in first quarter this year, said an official sources to me.

The bank is eager to jack-up its stakes at PT Adira Dinamika Multifinance Tbk, a multifinance subsidiary firm, and to refinance its subordinated debt.
“The option still open. It could be rights issue or other financing. The fund will be used to underpin business expansion and lift up the bank capital base,” he said.
Danamon signed a call pption agreement on 22 December 2006 as well to purchase up to 29% of the remaining total issued shares of ADMF at pre determined strike prices. This call option will expire on 30 April 2009 amounting of Rp186,87 billion.
The bank owned by Singapore conglomerate Temasek has call option to refinance subordinated debts of US$300 million in March 2009.

Finance Director of Danamon Vera Eve Lim previously said they have a plan to refinance all the debt on scheduled.

In order to seek cash, Danamon hired Citigroup and Morgan Stanley as a jointly lead underwriter of rights issue. Asia Financial (Indonesia) Pte Ltd c/o HSBC owns a 67.88% of Danamon shares.

Telkom, do more, talk less!

21 Banks both local and foreign are now in the war to grab a financing deal for the biggest state-owned telecommunication operator PT Telekomunikasi Indonesia Tbk (Telkom).

My source told me that on Thursday last week, Telkom announced its need to gather US$700 million or Rp8 trillion of financing deal. Telkom said it needs more fresh loan to underpin its merge and acquisition other firms.

If Telkom, the holding firm of the biggest cellular operator Telkomsel, would swallow a regional telecommunication players, then it needs to prove it. For many years and many times, Telkom's Commissioner Tanri Abeng said to the press that it is keen to buy regional player...so will Telkom prove its desire, please do more and talk less!

Semen Gresik to acquire CIMA?

State-owned enterprise publicly listed firm PT Semen Gresik Tbk is now holding a beauty contest to select the best advisor helping it to expand business into Malaysia and Thailand.

The top three of foreign investment banks, Credit Suisse, JP Morgan, and Merrill Lynch, are in the short listed of the process.

A dream of Semen Gresik, the biggest cement producer in Indonesia, becoming a regional player revealed when Rajawali Group, a local conglomerate owned by tycoon Peter Sondakh, enrolled the cement firm by acquiring of 24.90% of shares from Cemex SA. I still remember when one of Semen Gresik's executive Darjoto S. explained about the dream. But, so far the dream remains difficult to be achieved.

In fact, Semen Gresik also plans to expand locally with its huge agenda. The company set up capex of US$1.25 billion or Rp13.75 trillion in 2008-2014 to underpin the agenda. Two coal-fired power plants with a capacity of 70 MW will be the next.

How about regional expansion? Remains unclear I think.

So far, Semen Gresik has planned to hold an extraordinary general meeting at the end of this month to suport its local expansion. Last year, the company recorded 18.2 million ton of production volume and 18 million ton of sales volume.

But, I hear from my source a side from its domestic plan to jack up production capacity, the cement producer is looking to buy a cement maker in Malaysia. The target is state-owned cement producer called Cement Industries of Malaysia Berhad (CIMA).

How about the funding?

Semen Gresik is one of the cash rich state-owned companies. As of September last year, the firm booked cash of Rp3.3 trillion. A consortium of lenders lead by PT Bank Mandiri Tbk has commited to provide Rp6.3 trillion of loan. So, no doubt about its ability to buy CIMA.

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Team: Wisnu Wijaya & Linda Silaen. With more than five years experiences covering stock market for stellar daily business newspaper Bisnis Indonesia and Dow Jones, we strive to provide insider information.

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