JAKARTA (Yosefardi) – Investors sell off shares of PT BW Plantation Tbk (BWPT) on concern over the company’s rights issue for 27.02 billion new shares at substantial discount to acquire plantation assets of Rajawali Corpora.
At 2.53 pm Jakarta time, BWPT dropped 11.86% to Rp525 per share with over 25 million shares exchanged hands. The stock had fallen 45.5% since September 23. Year to date, BWPT has lost 61%.
BW Plantation, in an explanation to the Indonesia Stock Exchange (IDX) reveals it will use proceeds of rights issue to acquire Green Eagle Holding Pte Ltd (GEH) including the transfer of receivables of Green Eagle Palm Limited (GEP). GEP put loans into GEH for working capital, investing in new planting area and tending the yielding plant.
BWPT had earlier said it will use rights issue proceeds of Rp10.53 trillion for acquiring GEH from Louis Dreyfus Commodities Asia Pte Ltd. GEH’s subsidiary, PT Papua Sawit Raya had in August 11, 2014 acquired 9 plantation companies with plantation area of 128,953 hectares.
BWPT will issue 27.02 billion new shares, priced at Rp390-411 per share. If the existing shareholders did not exercise their rights, then Rajawali Capital will potentially hold 48.22% of BWPT shares and other standby buyers to hold 37.49%. The public investors’ ownership will drop to 4.54% from current 30.81%.
BW will seek approval from PT Bank QNB Kesawan Tbk and PT Bank Negara Indoneia Tbk as creditors, but to seek no approval on the rights issue.