Kramat-Kartika swap

Kramat-Kartika swap

KUALA LUMPUR (Reuter): Malaysia's Kramat Tin Dredging Bhd's plan to buy shares in an Indonesian timber firm via a share swap has been approved by the Securities Commission, a company statement said.

The commission has also given conditional approval for a bonus issue following completion of the swap.

In an announcement late last year, Kramat Tin said that in a move to penetrate Indonesia's timber industry, it would acquire a 31.86 percent stake in Indonesia's PT Artika Optima Inti (AOI) via a share exchange.

AOI, an integrated plywood manufacturer, is part of the Djajanti Group which is controlled and managed by Burhan Uray.

The commission set as one condition for its approval that Uray should pay the shortfall to Kramat if an initial public offering of the AOI shares on the Jakarta Stock Exchange was less than three ringgit per share.

The second condition was Uray would also pay for the shortfall if AOI's after tax profit is less than the 127.3 million ringgit a year guaranteed under the agreement.

AOI has been granted concessions on 849,100 hectares of forest located in Maluku and Irian Jaya and holds other concessions under the group.

AOI is set to be one of the largest capitalized stocks on the Jakarta exchange with its proposed listing.