JAKARTA (TheInsiderStories) – Shareholders of a diversified group PT Barito Pacific Tbk (IDX: BRPT) approved the acquisition of 66.7 per cent Star Energy Group Holdings Pte Ltd shares with worth US$755 million. The acquisition of Star Energy its expecting to be close in June.
President Director Agus Salim Pangestu explained the shareholders also approved preemptive right issues plans as much as 5.6 billion new shares. Shareholders who did not exercise its right will be diluted by a maximum of 26.72 per cent.
Along with the issuance of new shares, the company will issue warrants as much as 1.4 billion units. The warrant will be given for free as an incentive to the company’s shareholders and the holders of rights who carry out its pre-emptive rights.
“Thus, we expect to receive the funds as much as $1 billion, which will be used to support business development Barito Pacific,” Pangestu told reporters on Wednesday (11/04).
The company said, the rights issue proceeds or $520.69 million will be used to partially fund the acquisition of Star Energy shares, to pay debts and the remaining shares will be used to strengthen the company’s working capital.
The acquisition of Star Energy demonstrates the commitment and seriousness of the company in developing its business in the energy sector.
It was once before, Barito Pacific established a new subsidiary, PT Indo Raya Energy, which is engaged in coal-based power generation sector. A joint venture between its subsidiary’s PT Barito Wahana Lestari with a subsidiary of PT Indonesia Power will build Java 9 and 10 power plant.
Two of the coal power plant is expected to produce electricity for 2×1.000 megawatts.
“With the entry into the consolidation of the Energy Star, the company’s business structure will be more complete, and make Barito Pacific as a business group based geothermal energy and petrochemical integrated and largest in Indonesia, “he said.
Prajogo Pangestu became the controlling shareholder of Star Energy since June, 2007, when his Star Energy Investment Limited (SEIL) acquired a 71 percent shareholding in the company for $300 million. The remaining 29 per cent is owned by London-based Ashmore Investment.
Prajogo owns 60 per cent of SEIL, with business partner Agus Prajosasmito holding the remaining 40 per cent, giving him a 42 per cent interest in Star Energy.
Star Energy develops geothermal power plant Wayang Windu in Bandung, West Java. The geothermal power plant represents more than a simple commercial asset for Prajogo and his partners. It is also a foothold in geothermal, a sector expected to boom as Indonesia taps more of its renewable energy resources.
Prajogo’s move into energy also demonstrates his resilience. Once the world’s largest exporter of plywood, he was forced out of sight when the 1998 East Asian financial crisis dried up demand.
Then, suddenly, he was back. In 2007, Barito acquired a 62.76 per cent stake in PT Chandra Asri Petrochemical Tbk (IDX: TPIA) and its subsidiary PT Styrindo Mono Indonesia for Rp 9.7 trillion. Chandra Asri producers ethylene, polyethylene and propylene, raw materials for the production of plastics.
The following year, Barito Pacific acquired a 77.93 per cent stake in listed polypropylene producer PT Tri Polyta Tbk for $180 million. The purchases established Prajogo’s hold on a critical business, so far the only one of its type in Indonesia. Now he is moving ahead in energy.
Star Energy was founded six years ago by businessman Supramu Santosa. It owns the Kakap oil and gas block in Natuna in the Riau Islands, which has a daily production volume of 8,000 barrels of oil and 60 million cubic feet of natural gas. Oil and gas assets still at the exploration stage are in Bayumas in Central Java, Sebatik in East Kalimantan and Sekayu in South Sumatra.
Wayang Windu unit one, which has a capacity of 110 MW, has been in operation since 2000. The $200 million Wayang Windu unit two has a capacity of 117 MW. With a combined generating capacity of 227 MW, Star Energy Wayang Windu is the largest private geothermal power plant company in Indonesia.
In 1993, the company listed its shares on the Jakarta and Surabaya bourses (recently merged to become the Indonesia Stock Exchange). At the time, the company had five processing mills altogether, producing plywood, block boards, particle boards and woodworking products for exports to Europe, Asia and America.
The Asian financial crisis in 1997-1998 had forced the company to discontinue the production of plywood. The company then pursued the strategy of downsizing its timber-based operations by only producing particle board in Banjarmasin, South Kalimantan, whilst diversifying its business into other resource-based industries.
Preceded by several years of thorough planning and preparation, Barito Pacific has been transformed into a fully diversified resource-based enterprise.
The acquisition of Chandra Asri in 2007 marks a key milestone for Barito Pacific. The inclusion of Chandra Asri in the company’s portfolio has given Barito Pacific a strategic base from which to grow downstream oil and gas businesses, while at the same time also continue to seek opportunities to develop stakes in the strategic energy resources sector in the future.
That acquisition then followed by the acquisition of Tri Polyta, a major downstream producer of polypropylene that sourced its propylene raw material from Chandra Asri, in June 2008.
In 2011, PT Chandra Asri and PT Tri Polyta merged to become PT Chandra Asri Petrochemical Tbk. Currently, 71.19 per cent of Barito shares are held by businessman Prajogo Pangestu, 1.45 per cent by PT Barito Pacific Lumber, 0.46 per cent by PT Tunggal Setia Pratama and public 26.24 per cent.
Barito Pacific is currently engaged in the forestry, petrochemicals, property and plantation industry sectors, and ultimately evolved into a fully diversified resource-based enterprise with growing interests in the mining and energy sectors, among other developments.