JAKARTA (TheInsiderStories) – Two unit of PT Barito Pacific Tbk (IDX: BRPT), PT Chandra Asri Petrochemical Tbk (IDX: TPIA) and PT Styrindo Mono Indonesia plans to merge, said the company today (10/14). After merged the new company will have total assets US$3.62 billion.
The issuer said, Chandra Asri will become the survivor entity firm and remain as a public company and have total assets US$3.29 billion. While, Styrindo established as a foreign investment company focused on styrene monomer manufacturing with total assets worth of US$327.79 million.
“We considered that the merge is inline with our goal to creates an integrated petrochemical company in Indonesia,” wrote the management on Wednesday (10/14).
Currently, the shareholders of Chandra Asri are Barito with ownerships 41.88 percent, Thai’ SCG Chemicals Co. Ltd., 30.57 percent, Prajogo Pangestu 15.07 percent, Marigold Resources Ltd 4.75 percent, and public 7.73 percent.
It said, the proposed merger will effective on Jan. 1, 2021 or any other date as approved by the two companies. Chandra Asri targeting to get the approval from the shareholders on Dec. 7, 2020.
Releases Rupiah Bonds
At the same day, the chemical producer announced to releaser local bond up to Rp600 billion after raised Rp1 trillion in August. The new bond offered with an interest rate of up to 8.2 percent and have a three years tenure.
Chandra Asri has appointed PT Trimegah Sekuritas Indonesia Tbk (IDX: TRIM) and PT CIMB Niaga Sekuritas as joint lead underwriters for the issuance. The noted has obtained idAA- rating from PT Pemeringkat Efek Indonesia (Pefindo).
The manufacturer will conduct a bond public offering period on Oct. 26 – 27 with a target of listing the bonds on Nov. 5. Last year, the management said needed investment funds of up to $5 billion to build a second factory in Cilegon, Banten. To meet these investment needs, the company plans to increase capital through a rights issue scheme and invite the strategic investors.
Currently, the company has started the operating of the Methyl Tert-butyl Ether and B1 plants, which are the first in the country. President Director of the issuer, Erwin Ciputra, stated, with the operation of this new factory, he hope that the government’ goal to reduces import by 35 percent in 2022 can be achieved.
The new factories were built with investment costs of $130.5 million and have a capacity of 127,000 tons per year. While the Butene-1 plant will have a capacity of 43,000 tons per year. These new factories will absorb Raffinate-1 to be used as raw material. In October of 2019, Chandra Asri will also complete the construction of a polyethylene and polypropylene factory.
With the operation of these two new factories, the company’ production capacity could increase to 4.2 million tons from the current 3.9 million tons. After operate four new factories in this year, the producer will also complete the construction of the CAP 2 factory in June 2024.
The manufacturer will allocate around $5 billion to build the factory. The company is looking strategic investors to build the plants. The director stated, “After CAP 2 is operational, our production capacity can increase to 8 million tons.”
The subsidiary of Barito as the majority shareholders, is the largest integrated petrochemical company producing olefins and polyolefins. The company factories located in Cilegon and Serang, Banten Province. The company is the only producer who operates a naphtha cracker and is the sole domestic producer of ethylene, styrene monomer and butadiene.
In addition, the unit is also the largest polypropylene producer in Indonesia, including produces plastic raw materials and chemicals used for packaging products, pipes, automotive, electronics, others.
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