JAKARTA (TheInsiderStories) – Singapore’ Agri Pte. Ltd., and FKS Food and Ingredients through its subsidiaries, PT Pangan Sejahtera Investasi, will become the standby buyer the private placement of PT Tiga Pilar Sejahtera Food Tbk (IDX: AISA) or TPS Food, said the company today. The consumer goods producer has planned issues up to 6 billion Series B shares or 55.62 percent of the issued and fully paid-up capital at Rp210 a unit.
The plans is targeting to get an approval from the shareholders on Sept. 30, 2020. All the proceeds, said the management, in order to improve the financial condition of the company that has negative net working capital and the liabilities exceed 80 percent of the company’ assets. From the private placement program, the issuer to obtained around Rp1.26 trillion (US$86.30 million).
As reported, TPS Food has obligation to pay debts with an outstanding balance of Rp900 billion. Then, SUKUK Rp 1.2 trillion, loans to Citibank Rp434.89 billion, JPMorgan Rp333.78 billion, and Standard Chartered with total amount of Rp93.14 billion.
Last July, the food producer announced to issue 1.57 billion shares with a nominal value of Rp210 a share. The price of issued shares is at least equal to the average closing price of the company’ shares for 25 days on the regular market.
TPS Food expect to get an approval from the shareholders on August 9, 2019. FKS FI and its subsidiaries are not affiliated with TPS Food. FKS FI is controlled 99.99 percent by FKS Food and Agri Pte. Ltd. FKS Group is famous on the business of distributing soybean, sugar refineries and wet corn milling.
The company that serves many Asian markets has another business unit in Indonesia through FKS Multi Agro. Its unit’ chairma is Chandy Kusuma, son of FKS Group founder, Edy Kusuma.
According to TPS Food management, there was no change in controlling ownerships after the private placement. Public will hold 2.82 percent Series A shares and the other party controls the Series B shares.
Trophy 2014 Investor Ltd., hold of 6.11 percent, Primanex Ltd., 3.62 percent, and Morgan Stanley and Co LLC 4.38 percent. Then, JPMCB NA RE-Throphy will hold as much as 6.27 percent, BBH Luxembourg S/A Fidelity by 5.36 percent, public 38.66 percent, and FKS FI or other investors 32.77 percent.
TPS Food hope the funds from the private placement will give a positive impact to the company, reduce the debt to equity ratio, finance the company’ operational activities and increase the liquidity of stock in the market.
Since 2017, 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. The 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. 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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