Singapore' investment firm, Zico Trust Ltd., increases its ownership in taxi operator, PT Express Transindo Utama Tbk (IDX: TAXI) after converted the mandatory convertible bond (MCB) into shares through a private placement program - Photo by Rajawali Corpora

JAKARTA (TheInsiderStories) – Singapore’ investment firm, Zico Trust Ltd., increases its ownership in taxi operator, PT Express Transindo Utama Tbk (IDX: TAXI) after converted the mandatory convertible bond (MCB) into shares through a private placement program. After the rights issue, one of the shareholders the unit of Rajawali Corpora will hold 22.39 percent of ownership.

Another existing shareholder has increased its ownership is an investment bank, UOB Kay Hian Pte. Ltd., and PT Asuransi Multi Artha Guna Tbk (IDX: AMAG), an insurance company controlled by Fairfax Asia and listed on the Toronto stock exchange. On Jan. 20, the issuer has made an additional capital without pre-emptive rights related to the conversion of the 2019′ MCB) debt due on Dec. 31, 2020.

The listing of additional shares for the conversion of the principal bond issued in 2014, totaling 4.078 billion units with execution price of Rp100 a share or in total Rp407.80 billion (US$29.12 million). According to the president director, Johannes Triatmojo, the parties who take the shares are all Express mandatory convertible bond (MCB) holders in 2019.

Before the program, the company has carried out an amortization of MCB from the initial principal amount Rp466.12 billion to Rp 407.8 billion. The firm controlled by local tycoon Peter Sondakh then paid an amortization of Rp58.29 billion by selling the collateral bond assets.

Then, from July 2, 2019 to Jan. 5, 2021,  Express has carried out seven amortization with a total value of Rp192.19 billion. These convertible bonds have a total value of Rp1 trillion. The first phase is Rp400 billion which is converted into shares through a private placement.

Then the second stage of Rp600 billion is amortized through the sale of fixed assets. In addition to the mounting debt bondage, its businesses is also pressured by the spread of the COVID-19. The company, which has been operating commercially since April 1989, has experienced a halt and restriction of the operations since the spread of the deadly virus, especially regular taxis, premiums, vehicle rental and limousine services.

Express has received a summons for the Debt Payment Obligation on June 30, 2020 regarding the request submitted by its debtor received by the Central Jakarta Commercial Court. In the midst of this pressure, Triatmojo said that his party would undertake a number of strategies to restore the company’ condition.

He revealed, the amount of its bond debt was Rp681.9 billion as of March 31, 2020. Most of the obligations were Rp549.1 billion in debt and Rp90 billion in arrears and penalties, Rp55 billion in debt tax, Rp8 billion and short-term debt, the third parties loans amounting to Rp37 billion.

Going forward, said Triatmojo, the taxi manager consistently strives for steps that have been and will be implemented in a sustainable manner, including continuing the bond debt reduction program by selling non-core and non-productive assets.

In addition, continuing cost efficiency programs and implementing strict budget policies in both operations and headquarters, through adjusting the number of employees and consolidating operations and closing a number of inactive pools.

While, the number of taxis owned by the operator has also decreased significantly to cover the company’ debt. In 2016, the company still had 10 thousand taxis and this is slowly decreasing to 9,600 units in 2017, 9,300 units in 2018, 7,400 units in 2019 and 3,800 units in 2020.

Beside Zico, UOB Kayhan and Asuransi Multi Artha Guna, the other shareholders of Express are Rajawali Corpora 17.81 percent and public 48.62 percent.

US$1: Rp14,000

Written by Editorial Staff, Email: theinsiderstories@gmail.com