The person said Bakrie Sumatera aims to buy PT Domas Agrointi for $500 million and is considering selling global or local-currency bonds to generate the rest of the funds needed.
Bakrie Sumatera Finance Director Harry M. Nadir confirmed the company aims to hold a rights issue to fund the Domas takeover, but declined to comment on the amount it intends to raise or how many shares it might sell.
A non-preemptive rights issue is one in which existing shareholders are not given the option of pre-ordering set amounts of shares ahead of the sale.
He said Domas would initially provide only a small revenue contribution in 2010 should the acquisition succeed, but said its revenue contribution would become "significant" in 2011 as its palm oil plantations mature.
Bakrie Sumatera has previously said it plans to acquire Domas by assuming $300 million in debt owed by the parent company to local lender PT Bank Mandiri as well as $200 million owed to Credit Suisse and Deutsche Bank.
Aside from Bakrie Sumatera, the Sinar Mas group, which owns rival palm oil firm PT Sinar Mas Agro Resources & Technology, has also previously said it aims to buy the Domba Mas unit, according to a report by state news agency Antara.
Nadir said the company submitted a request for regulatory approval for the rights issue and will seek shareholder approval at a Jan. 12 extraordinary general meeting.
When asked about other possible fundraising plans, Nadir said the company's funding requirements are "very big," but declined to elaborate.
Bakrie Sumatera shares were unmoved by the news it's moving closer toward the Domas acquisition, as analysts said a large number of corporate actions recently announced by Bakrie-related companies have led to fatigue in the market. Its shares traded at IDR700 at 0430 GMT, unchanged from yesterday's close.
Bakrie Sumatera is 13.63% owned by diversified holding company PT Bakrie & Brothers, the flagship of the powerful Bakrie business group.
Bakrie Sumatera produced 400,000 metric tons of crude palm oil last year.
Nadir declined to specify Domas' CPO output volume.
(Source: irco.biz)
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