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)