Apac Centertex to acquire two companies
Apac Centertex to acquire two companies
JAKARTA (JP): PT Apac Centertex Corporation plans to acquire PT Apac Inti Corpora and PT Batam Textile Industry at Rp 510 billion (US$222.7 million), the company announced after a public exposition yesterday.
To finance the acquisition, Apac Centertex will raise Rp 510 billion from the stock market by issuing 4-to-1 rights shares and 1-to-1 mandatory convertible bonds. Deutsche Morgan Grenfell is acting as lead underwriter.
Apac Centertex is a garment producer formerly owned by Robby Tjahjadi under its original name of Mayatexdian. The company was acquired by a consortium owned by Bambang Trihatmodjo and Johanes Kotjo last February.
In the last two years, the company booked net losses of Rp 9.8 billion and Rp 23.3 billion, putting it at risk of being delisted from the Jakarta Stock Exchange if losses continue this year.
It was reported that in the first six months of this year, Apac Centertex made a net profit of Rp 200 million.
The target company, AIC is a merger of three companies - Kanindo Succes Textile, Kanindo Prima Perkasa, and Kanindo Mulia Utama - which were founded by Robby Tjahjadi in 1990. Early this year, a consortium owned by Bambang and Kotjo took over the three firms by purchasing their assets and liabilities.
Apac Inti, with its paid-up capital of Rp 300 billion, is now 91.7 percent owned by PT Apac Century Corporation and 8.3 percent by cooperatives.
Kotjo told newsmen yesterday that Apac Inti currently holds total assets of Rp 1.3 trillion and has total debts of Rp 900 billion from state-owned banks.
The company's debt-equity ratio is 3:1, he said.
Kotjo said that Apac Centertex will reduce the debts of Apac Inti by Rp 300 billion after the acquisition.
He said that Batam Textile, which currently holds total assets of Rp 274 billion, has a debt of Rp 178 billion.
Although both the acquired companies have large debts, Kotjo claimed that the acquisition is a strategic one.
Apac Centertex's president Benny Sutrisno shared Kotjo's opinion. "We see a bright future after the acquisition. All the companies - Apac Centertex, Apac Inti and Batam Textile - have their own strengths. Their synergy will transform Apac Centertex from a simple garment company into one of the largest fully integrated textile groups," said Benny.
Apac Inti operates the largest spinning and weaving mill in a single location at Bawean, Central Java, where labor costs are lower than those in Jakarta and Bandung, West Java.
Batam Textile operates an integrated textile facility for spinning, weaving, dyeing, printing and finishing. It is also one of the largest exporters of textile products to the United States.
Benny explained that Apac Centertex will purchase Apac Inti shares at their nominal value, while Batam Textile is offering Apac Centertex a discount of Rp 20 billion for its shares, presently valued at Rp 100 billion.
Apac Centertex, however, is awaiting approval from its independent shareholders for the planned acquisition. (08)