Indonesia’s largest shipping firm PT Berlian Laju Tanker plans to issue mandatory exchangeable bonds worth US$368 million in November as part of acquisition plans to become the world’s top shipping firm.
The bond issuances are aimed at financing the acquisition of almost 100 percent ownership in Oslo-based Camillo Eitzen & Co. ASA (CECO), currently the world’s third largest shipping firm, and strengthening the company’s cash flow and liquidity, finance director Kevwin Wong said Tuesday.
The bonds, which can be converted into shares, are divided into two parts.
The first, worth $168 million or equal to 19 percent of shares in Berlian, will be used to finance the acquisition of shares in CECO. The buyers of the first tranche of bonds would be CECO shareholders, Kevin said.
The second bond issuance will be worth $200 million or equal to 23 percent of the shares in Berlian. The buyers of these bonds would include both shareholders of Berlian and CECO, who are already committed to buy 50 percent of the $200 million bonds. The remaining $100 million will be sold to other investors.
The company is in talks with a number of investment banks to buy the remaining bonds. The talks have been facilitated by Norway’s RS Platou Market.
“We predict that it (the mandatory exchangeable bond) will be issued between middle and late
November, pending approvals,” Kevin said.
The bonds will not carry any interest but investors are expected to gain from anticipated upward movements in Berlian’s shares, he added.
The conversion is expected to happen in July 2010.
Berlian president director Widihardja Tanudjaja assured observers and interested parties that there would no change in control at Berlian management as the company would still be owned 58 percent by the existing shareholders after the conversion.
Widihardja also added that the current largest shareholder of Berlian, PT Tunggaladi Baskara, had prepared a budget of up to $50 million to retain its control. It has been estimated that after the share conversion, Tunggaladi share ownership would be diluted from the current 53.34 percent to 31.65 percent.
Widihardja brushed aside worries from the market, which considered that the deal might weaken Berlian, on the grounds that the company did not have to spend any cash on the deal but instead paid for it with new shares.
Kevin said that the acquisition would bring benefits for the company as he predicted up to 25 percent growth in earnings before interest, tax, depreciation and amortization (ebitda) in the following years, supported by the global economy recovery and increasing demand.
Kevin said that chemical tanker rates might rise between 10 and 15 percent next year as demand recovered.
The consolidation between Berlian and CECO will form one of the world’s biggest shipping companies with the total fleet reaching up to 185 ships and tankers.
Total revenues for the combined company for the past year amounted to approximately $ 2.3 billion with an EBITDA of $499 million.
Including newbuilds the group will own and/or operate 157 chemical tankers, 14 oil tankers, 42 gas tankers and 50-60 bulk carriers.
The shares of Berlian at the Indonsia Stock Exchange (IDX) stayed at Rp 760 at market closing on
Tuesday after falling 1.3 percent on Monday.
No comments:
Post a Comment