JAKARTA (TheInsiderStories) – Indonesia Financial Service Authority (FSA) issued the latest regulation regarding capital increase through a rights issue.
The regulation is stated in the Financial Services Authority Regulation Number 14/POJK.04/2019 concerning Capital Additions of Public Companies with Preemptive Rights which replaces the previous regulation Number 32/POJK.04/2015.
In this regulation, the General Meeting of Shareholders held to request approval of rights issue must be attended and approved (quorum) by at least half of the retail shareholders. If at the first general meeting of shareholders, the quorum quota has not been reached, the company should carry out the general meeting of shareholders one more time.
However, if the quorum has still not been reached, then the third general meeting of shareholders will be held with the quorum number that determined by the FSA.
Responding to this, Director of Corporate Valuation IDX I Gede Nyoman Yetna hope that the new regulation is able to increase public participation in the decisions of listed companies. Also, it can build alliances between listed companies and the public.
Beside the quorum quota, the regulation also stipulates the provisions of companies that can carry out a rights issue. First, the bank is a recipient of a loan from Bank Indonesia or other government institutions which amounts to more than 100 percent of paid-in capital, or other conditions that can result in bank restructuring.
As for non-bank public companies, rights issues can be carried out if the company has negative net working capital and has liabilities exceeding 80 percent of the company’s assets.
Another condition that is permitted to conduct a rights issue is when the company is no longer able to fulfill its financial obligations at maturity to creditors with a maximum number of rights issues of 10 percent of the total shares.
This year, a number of companies plan to conduct a rights issue. PT Toba Bara Sejahtra Tbk (IDX: TOBA) will conduct a rights issue by releasing 470 million shares and a general meeting of shareholders will be held on May 15, 2019.
Then, PT Buana Lintas Lautan Tbk (IDX: BULL) will conduct a rights issue in the second quarter of 2019. The company will offer 3.4 billion new shares with targetted of fund of Rp 935 billion.
Meanwhile, PT Merdeka Copper Gold Tbk (IDX: MDKA) will release a 470 million new shares with a nominal value of Rp100 per share. Funds from the rights issue will be used for capital expenditure, repayment of financial obligations, working capital and subsidiaries.
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