Hanson is selling 8.35 billion ordinary shares to existing investors at an offering price of Rp 550 each.
Odyseey Asia Fund will be the standby buyer for the shares. The company plans to have an extraordinary general shareholders meeting on Nov. 20, before the rights issue takes place on Nov. 27.
MarkAsia Strategic was appointed as the financial advisor for the share sale.
Proceeds from the sale of shares will be allocated to help finance acquisition of almost the entire stake, at 99.9975 percent, in property developer Mandiri Mega Jaya through a Rp 4 trillion transaction. It will also repay debt to shareholders and fund working capital.
Prior to the acquisition, Hanson has direct control in two companies, De Petroleum International (60 percent) and Binadaya Wiramaju (99.5 percent).
De Petroleum is involved in waste treatment services, general trading, lubricants maker as well as contractor for infrastructure and mining and infrastructure. Meanwhile Binadaya, through its six units, is engaged in general trading, plantation and industry.
By owning nearly the entire stake in Mandiri Mega Jaya, Hanson will indirectly own 17 subsidiaries of the property company, giving it a strong grip in the sector.
“Property prices in Indonesia are relatively cheaper compared to neighboring Asian countries. The company is taking this opportunity to acquire a property company Mandiri Mega Jaya. It is expected that expansion into this line of business will increase profitability of the company in the future, which at the end will boost market capitalization and give added value to shareholders,” Hanson said in the prospectus.
Hanson said that Mandiri Mega Jaya owns land banks of 2,899.22 hectares and already develops a variety of property like housing residential, industrial estate, shop house and office space. He added that another competitive advantage of the property company is that its projects are located in heavily populated residential neighborhoods in and around Jakarta.
Hanson is well established in Indonesia. The company was established as a textile company in 1971 as Mayer Tex, of which its name was used as Hanson’s trading symbol (MYRX) at the Indonesia Stock Exchange.
Since 2004, it has been known as Hanson International.
In the Suharto era, the business held stakes in the textile, mining, hotel, construction, shoe, aviation and banking industries but was forced to sell some of the assets during the 1997-98 financial crisis.
source : The Jakarta Globe (19 Oct 2013)