Polysindo to issue rights to finance its expansion

JAKARTA (JP): Indonesia's major polyester manufacturer PT Polysindo Eka Perkasa will issue 99-for-100 rights in a bid to raise Rp 1.09 trillion.

Publicly listed Polysindo announced yesterday it planned to use Rp 993 billion of the proceeds to finance part of its US$800 million expansion program and the balance to strengthen its working capital.

Polysindo began its expansion program earlier this year to increase downstream production of yarn and fabrics and add incremental purified terepthalic acid (PTA) and polymer required to support these operations.

"This expansion is our strategy to increase our margin and value-added product lines such as specialized yarn and fabrics, polyester fleece and coated active wear," said R. Gururajan, a director of Polysindo.

Upon completion of the expansion project, Polysindo's capacities will be 253 million yards of fabric a year, 210,000 tons of filament yarn, 187,000 tons of staple fiber, 503,000 tons of polymer chips and 500,000 tons of PTA.

Polysindo's director of Investor Relations, Anastasia Vrachnos, noted:" We are adding high-end, value-added products to our portfolio, including polyester fleece and coated activewear in a tie-up with Helly-Hansen, Europe's leading brand name for high performance sportswear."

The export-oriented products, which will be coming on stream in the first quarter of next year, will help Polysindo achieve its target of at least $100 million in direct exports by the end of 1998, Vrachnos added.

She said the rights issue would also increase the liquidity of Polysindo's stock, strengthen its balance sheet and provide investors with an opportunity to participate in its future growth on attractive terms.

Polysindo's shares closed at Rp 1,400 on the Jakarta Stock Exchange yesterday. (vin)