Modernland cancels plan to issue warrants
Modernland cancels plan to issue warrants
JAKARTA (JP): The publicly listed Modernland Realty has
canceled its plan to issue warrants, initially designed as
sweetener for its mandatory convertible bonds.
Michael V. Aribowo, a commissioner of the company, said
yesterday that the decision not to issue the warrants was made
following the appeal from the chairman of the Capital Market
Supervisory Agency (Bapepam).
"We have to listen to Bapepam," he told reporters following
the extra-ordinary meeting of the company's shareholders.
The meeting approved the company's proposal to issue mandatory
convertible bonds (MCBs) worth around Rp 179.52 billion (US$83.5
million) and the appointment of Jahja Iskandar as a director of
the company, replacing Jusak Hartono.
Modernland initially planned to issue detachable warrants as a
sweetener for its MCBs but the Bapepam opposed the plan, saying
that pairing convertible bonds with detachable bonds could
confuse the investing public.
According to the initial scenario, all existing shareholders
would be entitled to subscribe at par four MCBs with a warrant
for each existing share held. The warrants to be the first of
such instrument on the local exchanges, could also be converted
into new shares at the end of the maturity period.
Michael said that MCBs, approved during the meeting yesterday,
will carry a half-yearly coupon of eight percent per annum, with
a conversion in or before eight years. The MCBs would be offered
to existing shareholders on a preemptive basis.
"All existing shareholders are entitled to buy MCBs worth Rp
2,400 (US$1.1) for each old share held. The bonds could be
converted any time during the eight-year maturity period," he
said.
Michael said that around 80 percent of proceeds from the bond
issue would be used to finance land acquisition, development of
residential projects and the remaining 20 percent for refinancing
of existing debts.
Modernland, a member of the widely diversified Modern Group,
is currently developing a 470-hectare real estate project in
Cipondoh, Tangerang, with an 18-hole golf course.(hen)