Oct 25, 2010

Kimia Farma revives rights issue

Publicly listed pharmaceutical producer PT Kimia Farma Tbk (KAEF) plans to hold rights issue in the first half of next year in a bid to boost free float and snap up Rp500 billion. revives
Kimia Farma's President Director Sjamsul Arifin said the company will issue 3 billion new shares into the market.
Post rights issue, the company's free float will enlarge from currently 550 million shares to 3.5 billion shares.
"The rights issue will dilute the government stake to 60%-65%, while public holders will balloon from 10% to 35%-40%," he said.
During the rights issue, Kimia Farma is estimated to issue new shares at Rp150 per share-Rp200 per share.
But, the corporate action is awaiting approval from the State-Owned Enterprises Ministry and calculation of P/E.
Kimia Farma will use the proceed to set up a plant in Kerawang worth US$10 million-US$12 million, partnering a Chiense state-owned.
Disclosure: No position at the stock mentioned above.

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