Tamara Bank to issue rights shares, bonds

JAKARTA (JP): Publicly-listed Tamara Bank will soon issue rights shares and subordinated mandatory convertible bonds to back up its short and long term financing.

Hendrik Suhardiman, the bank's vice president, said yesterday that the bank expects to raise Rp 142.83 billion (US$61 million) from the issuance of both rights shares and convertible bonds.

The proceeds from the right shares, which will be offered to shareholders later this month, are expected to reach Rp 51.75 billion, while the bond issuance in November is likely to add another Rp 142.83 billion, he said.

Around 20 percent of the proceeds from the rights issue will be used to finance operational activities and the other 80 percent to strengthen short and long-term loan financing.

"The funds from the issuance of convertible bonds will be used entirely to strengthen short and long-term financing," he said after an extraordinary meeting of the bank's shareholders.

"The trading period for the shares is scheduled from Sept. 30 to Oct. 17, while that for the bonds will begin in November," he said.

The convertible bonds -- with a maturity of 10 years -- will carry an interest rate of 15 percent per annum, calculated on the face value of the bonds, that will be paid quarterly.

Hendrik said that the bonds may be converted into shares any time between Nov. 12, 1996, and Nov. 12, 2006, at a price of Rp 2,200 per share.

He said that for every two existing shares, shareholders have the right to buy one new share at Rp 1,250 each and or subscribe to a unit of bond at face value.

The bank's shares on the Jakarta stock market slightly rose to close at Rp 2,800 yesterday, up from Rp 2,775 on Monday.

Tamara Bank, which was listed on the Jakarta Stock Exchange (JSX) in early 1994, recorded total assets of Rp 2.18 trillion as of June this year, with outstanding loans reaching over Rp 1.67 trillion. Its net profit in the January-June period reached Rp 17.38 billion.

Profit levels at the bank, which is 10 percent owned by the public, are projected to increase 45 percent to Rp 34 billion this year from Rp 23.42 billion in 1995. (hen)