Tri Polyta Deal to Create Top Chemical Company

Jakarta Globe, Reuters & JG | September 26, 2010

Tri Polyta Indonesia, the country’s No. 1 maker of polypropylene resins, said on Saturday that it would acquire nonlisted petrochemical firm Chandra Asri in a $1.2 billion share swap to form the biggest player in the sector.

The companies are controlled by Indonesian tycoon Prajogo Pangestu through holding company Barito Pacific.

“We expect the deal to be completed by January 1, 2011,” said Tri Polyta’s director, Suryandi.

Polypropylene resin is a lightweight yet durable material used by manufacturers to create fibers and molds.

Barito owns 77.9 percent of Tri Polyta, which is listed on the Indonesia Stock Exchange (IDX), as well as 70 percent of Chandra Asri. Barito will hold a 71.6 percent stake of the combined company after the deal.

Suryandi said Chandra Asri’s shareholders would be issued 2.93 billion in new Tri Polyta stock worth $1.2 billion in exchange for their equity. He declined, however, to give an indicative price for the new shares.

Tri Polyta has appointed Deutsche Bank and Singapore’s DBS Group as advisers for the share swap deal.

Prajogo, a business tycoon who emerged during former President Suharto’s era, lost ownership of the two chemical companies amid the 1997-98 Asian financial crisis, but has since managed to claw back control of the firms.

Tri Polyta in 2009 booked a net profit of Rp 483 billion ($54.1 million), which marked a huge swing back to profitability after posting losses of Rp 13.75 billion the year before.

Shares in Tri Polyta soared 6.6 percent on Friday to close at Rp 3,250.