Regent Pacific buys stake in Budi Acid
Regent Pacific buys stake in Budi Acid
JAKARTA (JP): Hong Kong-based fund manager Regent Pacific
Private Equity Ltd (RPPEL) will acquire a 5 percent stake in
agrochemical firm PT Budi Acid Jaya in a new equity-for-debt
swap.
In a statement issued after Budi Acid's extraordinary
shareholders meeting here on Friday, RPPEL said the investment
was part of two private equity and corporate restructuring
investment funds under the "Asian Opportunity" banner.
Budi Acid will issue 12.5 million new shares to RPPEL at Rp
2,800 (37 U.S. cents) per share, compared to the face value of Rp
500.
"Through an innovative structure, the proceeds from the
issuance will go toward reducing the debt of Budi Acid, thereby
improving operating performance and cash flow, as well as
strengthening the balance sheet," the statement said.
Budi Acid vice president Sudarmo Tasmin said the transaction
involved about Rp 35 billion (US$4.7 million), thus reducing the
company's debt burden from $41 million to $37 million.
The company owes $36 million to a syndicate of 18 banks led by
Overseas Chinese Bank Cooperation of Singapore, $5 million to
Bank Niaga and Rp 39 billion to state-owned Bank Ekspor Impor
Indonesia.
Sudarmo said the company had reached agreement with its
creditors to stretch settlement of debts over a five-year period.
He said Budi Acid and RPPEL were the first companies to
benefit from a recently introduced capital market regulation
allowing listed firms to issue new shares up to a specified limit
without resorting to a rights issue offering.
The deal between the two companies will be completed by mid-
December, he added.
Jakarta-based associate director of RPPEL Miscellia Dotulong
had been appointed to Budi Acid's board of directors.
RPPEL said it is actively investing in fundamentally sound
companies suffering from liquidity problems or mismatched assets-
liabilities.
"Indonesia remains firmly on Regent's map: despite all the
adversities and uncertainties, RPPEL has upheld its commitment to
Indonesia and its corporate sector, as evidenced by a track
record of investments successfully concluded in the past few
months," it said.
RPPEL managing director Ascanio Martinotti said that his
company was bullish about Indonesia and would continue to invest
in sound firms.
It has invested $28 million in several selected companies this
year, Martinotti said, and had allocated $60 million to be
invested next year.
RPPEL is the private equity investment arm of Hong Kong and
Frankfurt-listed Regent Pacific Group. It is investing throughout
Asian and in other emerging markets of South America, Russia and
eastern Europe.
The company has assets under management in excess of $1
billion, backed by cash and tangible liquid assets of
approximately $110 million.
Budi Acid Jaya, founded in 1979, is a member of the Sungai
Budi Group, one of Southeast Asia's largest agrochemical
industrial concerns. It is the world's largest integrated
manufacturer of tapioca starch.
The company booked net sales of Rp 546 billion as of
September, an increase of 150 percent from the same period last
year. (29)