Feb 9, 2011

Antam injects US$140.50 mio into PTICA

One of Indonesia's largest nickel and gold miner PT Aneka Tambang Tbk (Antam) has committed to provide US$140.50 million of shareholder's loan facility to its subsidiary dubbed PT Indonesia Chemical Alumina (PTICA).
In an official announcement submitted to Indonesia Stock Exchange (IDX) last night, Antam has entered into shareholder loan agreement with PTICA on February 4 2011.
The 4-month loan facility , charging an annual interest rate of 3.5%, will mature on June 30 2011.
The loan facility is set based on the value of equity injection which hasn't provided by Antam and Japanese company Showa Denko K.K.
Founded on February 26 2007, PTICA is a joint venture company established by Antam and Showa Denko with 80% and 20% shareholdings respectively. PTICA is set as a new company which will hold a feasibility study of chemical grade alumina's production facility in Tayan, Sanggau, West Kalimantan. 
The facility is expected to produce 300,000 tons of chemical grade alumina per annum. Of the total output, Showa Denko will utilize 200,000 tons to replace its output from Yokohama-based facility, and 100,000 tons will be sold in the spot market in Indonesia.
The facility requires a total investment cost of US$425.40 million and US$24.59 million working capital. In total, the project facility requires US$450 million investment.
Antam has committed to put a 35% of equity in PTICA or equal to US$126 million, while its partner, Showa Denko, will inject US$31.5 million.
The remaining cost of US$292.5 million will be fully funded by bank loan facility. However, Showa Denko up to now is unable to provide an equity injection before securing loan facility from lenders.
On the other hand, Antam still needs Showa Denko as one of conditions required by lenders before they provide loan for PTICA.
Adding to that, Antam has  agreed to extend period of equity injection from Showa Denko at end of March 31 2011.
Before March 31, Showa Denko is expected to determine its commitment on equity injection.
If Showa Denko is unable to deliver the equity partnersip, Antam will exercise rights to dilute Showa Denko's equity portion in PTICA on June 30 2011.

Disclosure: No position at the stock mentioned above.  

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