Jun 9, 2011

Delta Dunia plans rights at Rp900

Northstar Tambang Persada Limited, controlling shareholder of PT Delta Dunia Makmur Tbk (DOID) has committed to be the standby buyer for DOID's Rp1.22 trillion rights issue with commitment to buy of 814.08 million of unsubscribed new shares worth Rp732.67 billion. 
Delta Dunia, parent of Indonesia's second largest coal mining contractor, PT Bukit Makmur Mandiri Utama (BUMA), has set the exercise price at Rp900 per share for five-to-one rights issue. Northstar, which is owned by famed global investors Texas Pacific Group, Government of Singapore's Investment Corporation (GIC), and China Investment Corporation (CIC), has also committed to exercise its rights of 544 million shares. 
Delta Dunia aims to sell 1.36 billion new shares during the rights issue at Rp900, entitling the company with Rp1.22 trillion proceed, reflecting a 16,7% of Delta Dunia's yesterday market capitalization.
Post the rights issue, Delta Dunia's outstanding shares will increase to 8.15 billion shares from 6.79 billion shares.
Use of proceeds
Delta Dunia will use 38% of the proceed to pay debt which has been emerged by the loan facility agreed between Delta Dunia and BUMA. As of March 31 2011, the outstanding debt was US$267.94 million and will mature in 2015. BUMA will use the debt repayment from Delta Dunia as capital expenditure, working capital, and general purposes.
DOID will use 51% of the proceed to underpin organic growth, fulfilling capex to develop BUMA's equipment fleets and inorganic growth such as acquisitions. The remaining is intended as working capital for Delta Dunia.
Cum date in regular and negotiation markets scheduled on June 20 2011 and in cash market on June 24 2011. Preemptive rights trading date starting from June 27 to July 4 2011 and exercise rights starting from June 27 to July 4.
Disclosure: No position at the stock mentioned above.

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