United Tractors to raise $83.27m from rights issue

JAKARTA (JP): Publicly listed PT United Tractors, a major heavy equipment distributor in the country said yesterday that it expected to raise about Rp 241.5 billion (US$83.27 million) from its rights issue later this year.

ING Barings, the company's financial advisor, said yesterday United Tractors would seek approval from its shareholders for the planned rights issue at an extraordinary shareholders meeting on Oct. 31.

Existing shareholders would have rights to buy one new share for every two shares they hold at Rp 3,500 (US$1.20) each, it said.

The proceeds would be used to continue the expansion of each of its four business divisions of construction machinery, mining contracting, mining and material handling, the securities company said.

The one-for-two rights issue is scheduled for completion in December.

United Tractors' president M.A. Imanto said his company enjoyed strong stock market support this year before the recent turbulence in the regional financial markets.

"The rights issue will give us the opportunity to explain to investors the continued excellent outlook for our business," he said.

The company said PT Astra International, which has a 50 percent stake in United Tractors, had indicated its strong support for the company and agreed to subscribe all new shares it was entitled to.

Astra International's subsidiary, PT Astra Securities, would act as standby purchaser for the public portion of the rights issue, the company said.

United Tractors booked Rp 73 billion in net income and Rp 1.98 trillion in sales last year, it said.

The company also has extensive business interests in mining through two of its subsidiaries, PT Pamapersada Nusantara and PT Berau Coal.

Pamapersada is the largest mining contracting company in the country and Berau holds a 30-year concession coal mine in Kalimantan with 255 million tons of measured reserves. (das)