PT Polysindo plans rights issue

JAKARTA (JP): The shareholders of PT Polysindo Eka Perkasa yesterday approved the management's plan to issue 1.1 billion shares through a limited offering to raise Rp 552 billion (US$235 million).

PT Bahana Securities is appointed as standby buyer to purchase all unsold shares, up to a maximum of 317 million shares.

A director of Polysindo, R.A. Bratakusumah, said that existing shareholders are eligible to buy as many new shares, at Rp 500, as they have old ones. Therefore, the rights issue will double the company's total number of outstanding shares to 2.2 billion.

Yesterday each old share was valued at Rp 5,500.

Bratakusumah said that 41 percent of the total proceeds will be used to finance the establishment of a purified terephthalic acid (PTA) plant, and to expand the production capacity of the company's polyester chip unit in Karawang, West Java, and another unit in Kendal, Central Java.

PTA is a raw material used in the production of polyester chips.

"Another 44 percent will be used to strengthen our working capital, while the remaining 15 percent is allocated for equipment reconditioning at Kendal's unit," he added.

Bratakusumah said that the PTA plant will have a production capacity of 340,000 tons per annum and start commercial production at the end of this year.

He said the expansion projects will increase the company's annual production capacity of polyester chips by 330,400 tons per annum and the capacity of polyester fiber by 187,200 tons.

The company currently has three plants producing polyester chips (with an annual capacity of 50,400 tons), polyester fiber (7,200 tons) and polyester yarn (65,000 tons).

"The expansion is expected to start commercial production at the end of this year," Bratakusmah said.

He said that Polysindo will sell all of its polyester fiber and will consume part of its PTA and polyester chips to produce polyester fiber and yarn.

Polysindo registered a 95 percent increase in net profits to Rp 210 billion last year.

Net sales rose by 29 percent from Rp 749 billion in 1994 to Rp 970 billion last year. (alo)