JAKARTA (TheInsiderStories) - Tire-maker, PT Gajah Tunggal Tbk (IDX: GJTL) has prepared a capital expenditure of US$40 million for this year to settle the land acquisition from PT Softex Indonesia and other purposes, said the spokesman last week. In 2020, the producer has purchased an area of 80,020 square meters in Tangerang, Banten, for the expansion of Truck Bus Redial (TBR) factory Rp242.05 billion ($16.80 million) from the affiliated company.
The sale and purchase agreement was signed on August 28, 2020. The producer plans to increase the production capacity of the TBR plant from 2,000 units to 3,500 units per day around 2023 - 2024. 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.
Gajah Tunggal 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 spokesman, Kisyuwono told Kontan, the implementation of anti-dumping duties by the United States government on tire products from Taiwan, Vietnam, Thailand and South Korea is an opportunity to increase the issuer sales in the US.
With these various effort, he continued, Gajah Tunggal‘ sales is expected closes to 2019′ level at Rp15.94 trillion or up by 19.49 percent compared to last year worth of Rp13.43 trillion. He said, the 2020’ sales fell 15.7 percent from previous year. While, the net profit rose by 18.58 percent to Rp319 billion in 2020 followed the efficiency costs ran by the manufacturer.
In February 2021, the company announced to sell global bond up to $270 million will mature in 2026 with an indicative rate up to 9 percent. These bonds are secured by all or most of the assets of the company and its subsidiaries through company guarantees and collaterals.
All proceeds will uses to buyback the existing debt $250 million will mature on August 10, 2022 with an interest rate of 8.375 percent. Gajah Tunggal pays 104.1875 percent if the repurchase is carried out until August 10, 2021 or 102.09375 percent if the repurchase is made after August.
Currently, the manufacturer 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 company 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, Gajah Tunggal 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: Rp14,400
Written by Editorial Staff, Email: theinsiderstories@gmail.com
