May 26, 2011

Titan Nusantara ties up Lotte Data

PT Titan Kimia Nusantara Tbk, through its subsidiary PT Titan Petrokimia Nusantara, has signed an international private leased circuit (IPLC) treaty with Lotte Data Communication Company (LDCC) on May 23.
Total value of transaction for the installation and rental is less than Rp5 billion, or does not exceed 0.5% of the company’s total paid-in capital of.
Director of Titan Kimia Nusantara David Tsung Hung Chao said that the LDCC will provide IPLC installation and rental services and terminal equipment rental that will connect the network of Honam Petrochemical (HPC) with Titan Petrokimia Nusantara (TPN).
"The agreement will be effective for a period of 6 months. Such period will automatically be extended each month, unless there is notice of termination by either party within 14 days before the expired date," he explained in the disclosure of information to stock exchange authorities, today.
HPC is a company under Lotte Group, which is also knaown as the major shareholder in Titan.
On 9 November 2010, Honam indirectly acquired 72.32% stake in its parent company from Titan Chemicals Sdn Bhd. After the acquisition, Honam became the indirect controlling shareholder of Titan, through one of subsidiaries of Malaysia Titan, namely Titan International Corp Sdn Bhd, which controls 90.4% stake in the company.
In return for providing services of installation and rental, TPN will provide installation cost that will be paid one time after the agreement signed and the rental cost of IPLC and equipment that will be paid every month for 6 months ahead.
"Overall, the total value of transaction for installation and rental is not more than Rp5 billion," explained David.
According to David, the benefits of transactions that fall into this affiliated category for TPN is the company may get a good service with a more competitive price.
Besides, leased line enables communication between TPN and HPC in Seoul through unified communications. "Savings will be achieved by lowering the cost of international direct dialing," he said.
With the network, as he said, the solution time also becomes shorter with the support of software from HPC in Seoul through a leased line.

Disclosure: No position at the stock mentioned above.

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