Mar 31, 2011

CLSA, UBS advise UNTR rights issue

A distributor of heavy equipment with Komatsu brand as well as a coal mining contractor PT United Tractors Tbk (UNTR) is planning to raise Rp6.07 trillion proceed from the fourth preemptive rights issue scheduled in mid of May.
An investment manager familiar with such corporate action said United Tractors had mandated two financial advisers, namely CLSA Securities and UBS Securities, for the right issue.
Unveiled in a prospectus published today, United Tractors is keen to issue 403.26 million of new shares with offering price at Rp15,050 a share.
Each holder of 33 shares of United Tractors is eligible to have four preemptive rights (HMETD) in return for one new share to issued by the company.
PT Astra International Tbk (ASII), a controlling shareholder of United Tractors with 59.5% stake, committed to benefit its whole rights in the right issue.
In addition, Astra has committed to be a standby buyer for the new shares of United Tractors which may not be absorbed by public as well.
During the rights issue, about 90% of the proceed or equivalent with Rp5.46 trillion will be utilized for financing of several projects of the company and its subsidiaries on coal business sector, including mining contracting (25%-35% of net proceed), coal infrastructure, and mouth mine power plant (15%-25% of net proceed).
Out of the total, 45%-55% will be allocated to acquire coal concession.
While waiting for the project’s realization, the company could use until 35% of net proceed of the rights issue to pay off its revolving loan. The company will use the remaining proceed to finance its working capital and general need of the company as well as its subsidiaries.
Meanwhile, United Tractors reported net revenue to Rp37.32 trillion last year, or a 27.6% growth from Rp29.24 trillion in 2009.
Out of the consolidation revenue, the contribution of construction machine business stood at Rp17.27 trillion, while coal mining contracting was Rp16.93 trillion, and coal mining was about Rp3.12 trillion.
On the other hand, United Tractors fully controls shareholding in PT Pamapersada Nusantara, a coal-mining contractor.
In coal mining business, United Tractors owns a number of subsidiaries, namely PT Dasa Eka Jasatama (DEJ) and PT Tuah Turangga Agung (TTA).
DEJ mines, under control of Pamapersada, operate three affiliated companies as PT Nusantara Citra Jaya Abadi, PT Kadya Caraka Mulya, and PT Ekasatya Yanatama with coal concession of 22,830 hectares in South Kalimantan. Estimated coal reserves is about 14 million tons.
TTA controls coal mining through its subsidiaries, namely PT Telen Orbit Prima and PT Agung Bara Prima. In addition, Orbit Prima has coal reserves of 36 million tons coal, while Agung Bara has consession area of 1,365 hectares with coal reserves of 9.2 million tons.
At end of last year, mine site of DEJ produced 2.6 million tons of coal, while Orbit Prima generated 670,000 tons of coal.

Disclosure: No position at the stock mentioned above.  

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