Modern to float MCBs and warrants on local markets
Modern to float MCBs and warrants on local markets
JAKARTA (JP): PT Modernland Realty, a publicly-listed
residential and real estate developer, will issue mandatory
convertible bonds (MCBs) and detachable warrants to raise fresh
funds of Rp 299.2 billion (US$137.05 million) to support its
expansion program.
Michael V. Aribowo, a commissioner of the company, said
yesterday the MCBs and detachable warrants would be offered to
existing shareholders on a pre-emptive rights basis.
"We expect a gross proceed of Rp 299.2 billion from this
limited public offering," he said.
Michael said proceeds of the rights issue would be used to
finance land acquisition, development of residential projects and
refinancing of existing debts.
Modernland, a member of the Modern Group, which includes
listed subsidiary PT Modern Photo, is currently developing a 470-
hectare real estate project in Cipondoh, Tangerang, with a
planned 18-hole golf course.
As at June 30, 1994, the company had total shareholders' funds
of Rp 211.5 billion, with after tax profits for the year ended
Dec. 31 1993 and the half year ended June 30 this year of Rp 20.1
billion and Rp 16.6 billion respectively.
PT Schroders Indonesia has been appointed as manager of the
proposed issue of the company's MCBs and warrants.
Jonathan Jochanan, Schroders' president, said all existing
shareholders would be entitled to subscribe, at par, for four
MCBs with a warrant for each existing shares held.
Coupon
The rupiah-denominated MCBs will have a face value of Rp 1,000
each and will carry a semi-annual coupon of eight percent per
annum, with conversion in or before eight years, and in any case
mandatory conversion of all outstanding convertible bonds will
take place at the end of eight years.
"Each MCB will be convertible at a price of between 35
percent to 40 percent discount to the 20 days prevailing average
market price of Modernland shares to a pricing date to be fixed
later," he said.
Jonathan said the warrants, which will come attached to the
MCBs, will give holders the option to purchase one new ordinary
share of Modernland at an exercise price of Rp 1,000 for each
warrant.
He explained that warrant holders who exercise their
subscription rights will pay for the exercise price in cash.
"The exercise period will span five years from the date of
issue after which those warrants that remain unexercised would
expire," Jonathan said.
He said that upon issue, the MCBs and warrants, which will be
separately traded on the Jakarta Stock Exchange (JSX), may be
transferred to new holders at any time.(hen)