Sep 22, 2010

Pan Brothers to launch 1:4 stock split

PT Pan Brothers Tbk, publicly listed Indonesia-based textile company, plans to split its nominal stocks with 1:4 ratio, ballooning its equity from 1.78 billion shares from 445.44 million shares.
Director of Pan Brothers Fitri Ratnasari Hartono said that such corporate action aims to make the company’s stocks more liquid particularly with the higher volume of stocks.
At the moment, the face value of the company’s stock reached Rp100, while the market price has gone up 6.74% to Rp950.
“The company plans to hold the second right issue using the audited financial statement as per 30 June 2010 as well,” he said during the press announcement filed to Indonesia Stock Exchange today.
He further explained that the right issue shall become an action aiming to jack up the company’s basic capital. The right issue will be held along with the extraordinary shareholder meeting on 15 October 2010.
In order to realize the right issue, the company will use the audited-financial statement as per the first semester of 2010 to fulfill the requirement from the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK).
Such approval is absolutely needed before the company conducts the upcoming extraordinary shareholder meeting.
However, the company did not explain the relations between the rights issue and the preemptive rights issues as contained in the company’s loan agreement with PT Minna Padi Aset Management amounting Rp50 billion.
In the agreement, Pan Brothers agrees to use the five-year convertible bond as the warrant, if the company fails to settle this debt, then the company should conduct rights issues or preemptive rights issue and appointing Minna Padi as the ready buyer.
The company’s shareholders until the end of August consists of Darwin (11%), PT Trisetijo Manunggal Utama (22.79%), PT Garuda Sawit Utama (19.37%), UBS Securities Singapura Non-Treaty Omnibus (6.48%), and public (40.15%).

Disclosure: No position at the stock mentioned above.

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