Photo Credit : APBI-ICMA.

JAKARTA (TheInsiderStories) – PT Trada Alam Mineral Tbk (IDX: TRAM), a mining company, will raise funds through rights issues and global bonds to meet the company’ expansion plans in the field of infrastructure and mining logistics with the Adaro Group.

First, TRAM will conduct a rights issue of 100 billion new shares accompanied by warrants of 35 percent of the company’s capital. Then will also get fundraising through global bonds of US$250 million. The maximum interest for these emissions is 12.5 percent ​​with a maturity of five years from the date of issuance.

Second, the issuer will seek approval for the planned 2nd Limited Public Offering of as many as 100 billion new shares with a nominal value of Rp100 per share with a rights issue. The action will be accompanied by the issuance of warrants 2nd series as much as 35 percent of the paid-up capital and placed by the company.

TRAM’ Managing Director Soebianto Hidayat said the funds raised would be used to fund infrastructure project development plans with a subsidiary of PT Adaro Energy Tbk (IDX: ADRO), PT Alam Tri Abadi. It wants to prepare a number of alternative plans for funding the work.

Hidayat has not revealed how much money is needed for the project, the number of funds he wants to raise. According to him, the estimated value will appear after the feasibility study is completed.

Currently, he continued, the middle of the process of making a feasibility study with several consultants. It hopes that this stage can be completed in the third quarter of 2019.

“We hope that the third quarter of 2019 will have a minimum feasibility study and find out how much capital expenditure is needed and how long the project will be completed,” he said in Jakarta, on Wednesday (05/22).

He called the infrastructure that will be worked together with Adaro Group such as ports, roads and other facilities related to logistics. However, the value of the project cannot be disclosed at this time.

TRAM also announced that it has signed a logistical and infrastructure cooperation agreement with Alam Tri Abadi on May 2, 2019. The agreed collaboration applies during the general period of the coal volume amount that will be agreed upon by the parties.

In the shipping business sector, Hidayat said that the company would focus its activities in the field of coal transportation or dry bulk.

The business line contributed 8.31 percent to 2018 total revenue. The total revenue pocketed by TRAM last year was Rp3.48 trillion, growing 573.33 percent from Rp517.23 billion in 2017. The sharp increase came from the sale of coal which contributed 68.46 percent of total income.

TRAM runs a business line producing and selling coal business through PT Gunung Bara Utama. The company realizes the production of 2.6 million tons in 2018. Until March 2019, the TRUMP’ production ranges from 350,000 to 450,000 tons per month. Total production this year is projected to penetrate 5 million tons.

“The company will improve the performance of the coal business subsidiaries. This is considered to support the company’s business stability for the following years,” he said.

On the other hand, a subsidiary engaged in mining services, PT SMR Utama Tbk (IDX: SMRU), realized a volume of overburden removal of 6.6 million bank cubic meters until March 2019.

SMRU’ Corporate Secretary Ricky Kosasih explained that the company currently works at PT Berau Coal and Gunung Bara Utama. As of March 2019, the realization of overburden removal volume reached 6.6 million bank cubic meters.

He said that the company’s 100 percent revenue contribution still came from a subsidiary of PT Ricobana Abadi. Thus, SMRU is still focused on the mining contractor business.

Ricobana Abadi provides open pit coal mining services and mining operational services for commodity producers in Indonesia. Its main services are stripping, heavy equipment rental and coal transportation.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com

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