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.