JAKARTA (TheInsiderStories) - Tire producer, PT Gajah Tunggal Tbk (IDX: GJTL), plans to issue five-years’ global bond around US$270 million, the management announced today. The proceeds from the note issuances use for buyback debt program worth of $250 million,
Based on the prospectus submitted to Indonesia Stock Exchange, the approval from the shareholders its expecting on March 15, 2021. The bond issued on August 10, 2017, have an interest rate of 8.37 percent, and will due on August 10, 2022.
Last year, Gajah Tunggal has purchased an area of 80,020 square meters in Tangerang, Banten, for the expansion of Truck Bus Radial (TBR) factory worth of Rp242.05 billion ($17.29 million) from is affiliated company, PT Softex Indonesia. The sale and purchase agreement was signed on August 28, 2020.
The management stated that the purchase of the land was an affiliated transaction because the beneficial ownership of both companies was the same party Michelle Liem, Mei Fung, and Tan Enk Ee. The party owns 40.5 percent of the issuer‘ shares through Denham Pte. Ltd.
The same party also owned Softex Indonesia through Softex International Ltd., by 99.21 percent. The issuer said that the TBR tire production facility requires additional land for expansion of production. The land owned by Softex is adjacent to the existing tire factory owned by the producer.
The acquisition payment done in stages. In details, Rp48.41 billion being paid by the company on August 28. The remaining, Rp193.64 billion will be paid at the latest when the delay ended on Feb. 26, 2021. At the same year, the manufacturer has decided cut its capital expenditure around $20 million from initial planned around $40 million.
Gajah Tunggal produced 55,000 passenger car radial (PCR) tires, 14,500 bias tires, 95,000 motorcycle tires, and 2,000 TBR tires per day in 2020. The manufacturer has capacity to produce 40,000 tons and 75,000 tons of tire cord and synthetic rubber per year, respectively, for both internal consumption and third-party sales.
With all business expansions, the issuer booked a net loss Rp104.59 billion from a year ago posted a net profit Rp139.5 billion. The net revenues amounted to Rp9.61 trillion, down 19.4 percent from the third quarter of 2019’s revenue of IDR11.9 trillion.
US$1: Rp14,000
Written by Editorial Staff, Email: theinsiderstories@gmail.com
