JAKARTA (TheInsiderStories) – The consumer producer, PT Tiga Pilar Sejahtera Food Tbk (IDX: AISA) or TPS Food raises funds Rp1.26 trillion (US$85.13 million) from rights issue of six billion Series B shares. Singapore’ Agri Pte. Ltd., and FKS Food and Ingredients subsidiaries, PT Pangan Sejahtera Investama and PT Asta Askara Sentosa absorbed most of the shares.
Pangan Sejahtera currently holds 32.77 percent ownership of the issuer. The buyer owned 99.4 percent shares of Asta Askara. Based on the prospectus, the amount of the shares equivalent to 55.62 percent of all issued and fully paid shares with price Rp210 a unit.
The management of TPS Food will ask the shareholders approval on Sept. 30. The proceeds from this private placement are planned to be used to reduce the company’ debt-to-equity ratio and will be used as working capital.
In detail, around Rp650.86 billion will be used to pay obligations in form of bonds, SUKUK and bank loans to JP Morgan. Then, Rp183.71 billion to pay the subsidiary debts through additional capital participation, loans, to refinance their debt to Citibank and Standard Chartered. And, amonting to Rp425.43 billion for working capital.
TPS Food serves many Asian markets and has another business unit in Indonesia through PT FKS Multi Agro Tbk (IDX: FISH). The chairman of the unit is Chandy Kusuma, son of FKS Group founder, Edy Kusuma.
There was no change in controlling ownerships after the private placement. Public still hold 2.82 percent Series A shares and the other party controls the Series B shares like Trophy 2014 Investor Ltd., (6.11 percent), Primanex Ltd., (3.62 percent), Morgan Stanley and Co LLC (4.38 percent), JPMCB NA RE-Throphy (6.27 percent), BBH Luxembourg S/A Fidelity (5.36 percent), public (38.66 percent), and FKS Group or other investors 32.77 percent.
Since 2017, TPS Food, the issuer had faced a financial problem, as there are allegedly double accountancy and data differences over the company 2017’ financial report. The ministry of finance has summoned TPS Food Management and the accountant office that audited the 2017 financial report, Amir Abadi Jusuf, Aryanto, Mawar & Partners, an affiliated audit firm and tax firm RSM International.
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 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. T
he auditor 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.
The Company has three postponement requests over the debt repayment obligations through its subsidiaries. On March 2019, they were asking for more delay due to this month on 8, 12, and 15 respectively. But its unclear how the debt payment continues. Currently, the AISA’ stocks have been suspended by Indonesia Stock Exchange since two years ago.
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