JAKARTA (TheInsiderStories) – Indonesian food producer, PT Tiga Pilar Sejahtera Food Tbk (IDX: AISA) or TPS Food plans to increase capital without pre-emptive rights or private placement. It will issue 1.57 billion shares with a nominal value of Rp200 a share or 32.77 percent of the company’s capital, said the information disclosure on Wednesday (07/3).
The price of issued shares is at least equal to the average closing price of the company’s shares for 25 days on the regular market, before the announcement of the ad. Before the suspension of shares, the price of AISA shares ends at Rp168. Therefore, the company could reap funds of Rp263.76 billion (US$18.57 million).
Furthermore, the private placement will be decided on the general meeting of shareholders that will be held in Jakarta on Friday, August 9, 2019. With the private placement, the ownership of each shareholder will decline to 32.77 percent of the company’s total capital.
From the fund of the private placement, the company will use it to strengthen the capital and financial structure. The management also hopes it will reduce the debt ratio to equity as well as to increase the company’s stock trading liquidity.
Indonesia Stock Exchange has suspended AISA shares since July 5, 2018. On July 1, 2019, IDX extended the suspension of AISA shares because it had not submitted the 2018 audited financial statements and had not paid a fine.
Previously, TPS Food had faced a financial problem, as there are allegedly double accountancy and data differences over the company 2017’ financial report. IDX consulted with Financial Services Authority (FSA) and Indonesia Public Accountant Institute discussing TPS Food financial report chaotic audit.
Finance ministry’ Financial Professional Coaching Center (FPCC) has summoned TPS Food management, Ernst and Young, public accountant, and the accountant office that audited the 2017 financial report. According to the FPCC, there will be sanction for the public accountant and its office if there’s a proven violation.
The 2017 financial report was audited by Amir Abadi Jusuf, Aryanto, Mawar & Partners public accountant office. It affiliated with the audit firm, tax firm, and world-reputable consultant RSM International.
The company management has stated ready to follow up on the investigation report later after the shareholders meeting in June. According to the TPS Food President Director Hengky Koestanto, the financial report investigation request came from shareholders so that it would need more suggestions from the stake owners.
According to company’ announcement, it has received Ernst and Young investigation report on March 25 while the investigation request came up in the Oct. 22, 2018’s shareholder’s meeting.
Ernst and Young found some differences between the internal data and financial records used by the auditors. It explains that there is allegedly Rp4 trillion (US$283.68 million) overstatement on the accounts of receivable, inventories, and fixed assets in TPS Group. Moreover, there are Rp662 billion sales and Rp329 billion EBITDA overstatement on the subsidiaries.
The audit also found Rp1.78 trillion funds flow through several schemes such as bank loan, time deposits withdrawal, funds transfer in the bank account, and financing of expenses of affiliated parties, from TPS Group to the former management.
TPS Food also faced several debt repayment obligations. Company has three postponement requests over the debt repayment obligations through its subsidiaries. On March, they were asking for more delay due to this month on 8, 12, and 15 respectively. But it is unclear how the debt payment continues.
TPS Food used to be a well-performed company, as its stocks included in a top index LQ45. It then being kicked out form the index after security officers’ raid to its rice plant, accused using cheap rice to create a premium product. The issue made company then divested its rice business line in December 2017, and the financial performance fell ever since.
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