Govt approves Adhi Karya's rights issue plan

The Jakarta Post, Jakarta

The government has approved the plan of state-owned construction firm PT Adhi Karya to launch a rights issue and will propose it to the House of Representatives in early 2008.

"The government's privatization committee has agreed on the plan, and we will determine the time of the rights issue after the House approves the plan," State Minister for State Enterprises Sofyan Djalil was quoted as saying by detikfinance.com news portal Wednesday.

He said the government, as the controlling stakeholder, was still considering whether it would use its rights to buy the shares.

"We can't tell you now, but the point is that we have agreed on Adhi Karya's rights issue so that the company can further develop its business," Sofyan said.

Adhi Karya president director Saiful Imam has said that his company actually had planned to conduct the rights issue this year, but had delayed it as the government did not endorse the plan at the time.

He said that the company had not decided how many new shares to issue, but it was planning to raise around Rp 600 billion (US$ 63 million).

"The rights share may account for 15-20 percent of the company's total shares," Saiful said. "But the number of the rights shares to be issued may be lower than that if the price is high."

The company is expecting to increase its net profit by 41.7 percent from an estimated Rp 120.1 billion this year to Rp 170.2 billion in 2008.

It is targeting next year to finish projects worth Rp 13.76 trillion, including Rp 8 trillion for new projects and Rp 5.76 trillion for on-going projects. (ndr)