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Rabu, 11 Mei 2011

Delta Dunia to launch rights issue - Insider Stories

PT Delta Dunia Makmur Tbk (DOID), parent of Indonesia's second largest coal mining contractor PT Bukit Makmur Mandiri Utama (BUMA), is nigh to launch a preemptive rights issue in a bid to put down its leverage.

For sure, Delta Dunia, which is indirectly owned by Texas Pacific Group, Government of Singapore's Investment Corporation, and China Investment Corporation, urgently requires an equity injection to underpin its expansion strategy.

If you compare with the leverage of PT United Tractors Tbk (UNTR), parent of Indonesia's largest coal mining contractor PT Pamapersada Nusantara, DOID's debt to equity ratio (DER) is 5 folds higher than United Tractors's DER, a measure that calculates a company's leverage.

In tandem with the proposed rights issue, DOID is underway to seal a new loan facilities to refinance existing of US$600 million which was secured in November. At what price the rights issue? and how much the size?

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