UT predicts 10% sales rise, plans $75m rights issue
UT predicts 10% sales rise, plans $75m rights issue
Sandy Darmosumarto, The Jakarta Post, Jakarta
PT United Tractors (UT), a subsidiary of automobile company PT
Astra International, sees a 10 percent growth in sales next year
and the possibility to offer a rights issue worth US$75 million.
The rise in sales will mainly accrue to the company's mining
division, PT Berau Coal.
UT president director Hagianto Kumala attributed the sales
increase to the worldwide rise in coal prices since mid-2003, a
trend expected to continue into 2004.
The price of brown coal, which is used in power plants, rose
35 percent over the past several months, while the price of
higher-quality coal experienced a 50 percent rise.
Berau operates a coal mine in East Kalimantan with an annual
production capacity of 10 million tons. The company does not
specify the quality of coal it produces.
"The contribution of higher coal prices to revenue depends on
the nature of the contract and the type of coal being produced,"
said Hagianto on Wednesday.
He added that "for long-term contracts, in which January
prices are applied, the rise in coal prices has not been felt.
This rise has, however, been felt in spot contracts."
Spot contracts make up around 20 percent of total contracts
between Berau and its buyers.
Hagianto said the high price would encourage the country's
coal producers to boost their output, which is a business
opportunity for the firm's mining construction unit, PT
Pamapersada Nusantara.
He said Pamapersada, which now has contracts with seven big
mining companies, would start to focus on small coal companies to
expand its business.
On debt restructuring, UT finance director Buntoro Muljono
said the firm planned a rights issue next year to pay off some of
its US$268 million debt.
"If two-thirds of creditors agree, we will opt to offer a
rights issue amounting to $75 million, with a minimum 80 percent
of the proceeds to be used to buy back debt," he said.
Parent company Astra will act as a standby buyer in addition
to other minority shareholders. Currently, Astra has a 49.2
percent stake in UT.
Consolidated revenue in the first ten months of the year
reached Rp 5.8 trillion, a 3 percent decline compared to Rp 6.01
trillion in the same period of last year. Around 85 percent of
the revenue is dollar denominated. Thus, the strengthening of the
rupiah has deflated the figure.
Pamapersada contributed 44.1 percent to revenue, while the
mining division accounted for 19 percent. It has also a
construction machinery division, distributing Komatsu heavy
equipment, which contributed 36.9 percent to revenue.