Oct 19, 2010

Antam, Timah need rights issue?

It seems a move to jack up stocks price of publicly listed tins producer PT Timah Tbk (TINS) and nickel and gold miner PT Aneka Tambang Tbk (Antam) by whispering rights issue plans of both state-owned firms into the market.
But, Timah Corporate Secretary Abrun Abubakar, in a formal letter submitted to Indonesia Stock Exchange (IDX) today, confirmed that there is no plan to hold rights issue.
He said the rights issue information came from the Ministry of State-Owned Enterprises, controlling shareholder in Timah and Aneka Tambang.
Timah is focusing on tin offshore production and expanding into downstream products in a bid to anticipate tins price fluctuation. As of June 2010, Timah recorded Rp619.87 billion cash.
Deputy of Restructuring and Strategic Planning at State-Owned Ministry Pandu Djajanto said the early talks on both state-owned firms rights issue have been held with Ministry of Finance. "Besides Aneka Tambang, we have set rights issue for Timah. It is early talks," he said as reported by Bisnis Indonesia today.
According to him, the proceed is expected to enlarge the companies' capital for business expansion.
If you look at Aneka Tambang's June financial report, the company records Rp3.23 trillion. Aneka Tambang is a cash rich company. Its cash was Rp3.23 trillion at the end of June 2010. 
The cash is far higher than cash of Indonesia's largest coal miner PT Bumi Resources Tbk (BUMI) which recorded US$66.78 million cash at the of June 2010 or Rp610 billion.    
Then, the question is which firms need additional money? Timah or Aneka Tambang? It is better for Ministry of State-Owned Enterprises hold private placement to add more public shares than rights issue.  
     
Disclosure: No position at the stock mentioned above.

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