Consortium of TPG Capital and Government of Singapore Investment Corporation Pte Ltd (GIC) has finally completed a purchase of all the non-voting interest in Northstar Tambang Persada Ltd (NTP), a 40% controlling shareholder of PT Delta Dunia Makmur Tbk (DOID) from certain investors or shareholders.
In a formal statement sent to management of Delta Dunia dated on December 17 2010, obtained by Insider Stories tonight, NTP Director Glenn T. Sugita said Northstar Equity Partners is not one of the selling parties and will continue to retain voting rights and a controlling interest in NTP.
TPG Capital is the global buyout group of TPG, a leading private investment firm founded in 1992, with US$48 billion of assets under management. Government of Singapore Investment Corporation Pte Ltd is a global investment management company established in 1981 to manage Singapore's foreign reserves.
Aldo Perkasa, fund manager at PT Danareksa Investment Management, said the accomplishment of NTP acquisition by TPG Capital consortium should be positive for Delta Dunia, a parent company of Indonesia's largest coal mining contractor PT Bukit Makmur Mandiri Utama (BUMA).
"With TPG Capital back-up, Delta Dunia will have more opportunity and access to funding sources and lower risk perception to corporate governance issue," he told Insider Stories.
Clear ultimate shareholders
Several sources said TPG-Government of Singapore Investment Corporation had acquired all stake in British Virgin Island-based NTP Ltd from Bakrie Group and Sinarmas.
Prior to this, Singapore-based Northstar Tambang Persada Pte Ltd had transferred 40% holding in Delta Dunia to BVI-based NTP Ltd. The transaction was done at Rp1,100 per share or par via shares crossing at the negotiation market at Indonesia Stock Exchange.
"By purchasing all the non-voting interest in NTP Ltd, TPG Capital and Government of Singapore Investment Corporation is now the ultimate shareholders of Delta Dunia. It is clear now who the ultimate shareholders of Delta Dunia," the sources said.
The sources said when TPG enters at a certain company, the share price will go up. "Look at shares price of BTPN Bank. Investors are still positive on TPG."
UBS Investment Research on a report published on December 6 2010 has jacked up the target price of Delta Dunia from previous Rp1,940 to Rp2,230 per share.
The price target reflects the lower interest expense ahead. "We continue to derive our price target using discounted cash flow methodology. Our operational assumptions are unchanged," said UBS analyst Felicia Tandiyono in her report.
"We are of the view that when the consortium of funds decides to exit NTP, the new structure would be more tax efficient. We would likely view such sales to third parties positively because it could provide clarity on the ultimate owner of DOID through NTP."
Disclosure: No position at the stock mentioned above.
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