JAKARTA (TheInsiderStories) — Indonesian holding company, PT Bakrie & Brothers Tbk (IDX: BNBR) raised Rp9.38 trillion (US$646.89 million) from private placement and mandatory convertible bond (MCB) issuance for the restructuring its swelling debts.
As stated in a disclosure on Thursday (12/13), BNBR issued MCBs valued at Rp8.83 trillion, as the 137.97 billion shares issuance tagged Rp64 per share. This will also dilute the company’s paid up and placed shares to around 85 percent. While, the private placement is valued Rp553.97 billion.
Before the private placement, Bakrie & Brothers paid up and placed shares amounted to 12.11 billion. It will increase to 20.77 billion after the corporate action.
Company management stated that the new shares and convertible bonds will not be traded for at least one year, after being recorded in the Indonesia Stock Exchange.
It said, the new shares issuance will be absorbed by Bakrie & Brothers creditor, Fountain City Investment Ltd. and Daley Capital Ltd. BNBR holds Rp2.91 trillion debt to Fountain City Investment Ltd. and Rp100.39 billion debt to Daley Capital Ltd.
This corporate action aims to resolve the company’s net working capital deficit. By June 2018, Bakrie & Brothers recorded a Rp7.21 trillion equity deficiency, increasing more than Rp1 trillion from the end of 2017.
The company’s liabilities also swelled almost threefold to Rp21.01 trillion. Its holds Rp9.94 trillion in short-term debt, which rocketed more than 1,000 percent.
Bakrie & Brothers engaged in the field of general trading, agriculture, mining, industry especially the production of steel pipes, construction materials, telecommunication systems, electronics, electrical goods, investments including equity participation in other companies.
The company restructured debts to Credit Suisse in 2016 and 2017 amounting Rp1.37 trillion and Rp1.037 trillion, respectively. This year, BNBR plans to restructure its three creditors with a combined debt of Rp9.87 trillion, accounting for 80 percent of the total.
US$1: Rp 14,500
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