Jakarta (ANTARA News) - Indonesia's market regulator has given its approval for a planned $1 billion rights issue by timber company PT Barito Pacific Tbk , which would be the fourth biggest rights issue in the country's history.
Shares in Barito Pacific slid more than 10 percent last week after Bapepam said it would take more time to review the rights issue, aimed at financing the acquisition of a petrochemical company PT Chandra Asri.
Fuad Rahmany, the chairman of the country's capital market watchdog, told Reuters in a mobile phone text message the agency had sent a clearance letter on Wednesday, which allows the firm to seek shareholder approval for the plan.
Barito Pacific, founded by Indonesian businessman Prajogo Pangestu and now 21 percent owned by Commerzbank (SEA) Ltd, said in a prospectus in late September that 87.95 percent of the proceeds from the rights issue would be used to help acquire a 70 percent stake in Chandra Asri.
Barito said the stake in Chandra Asri was valued at $1.05 billion, adding that it would seek approval from its shareholders for the acquisition and rights issue plan.
The company plans to acquire a 14.6 stake in Chandra Asri from PT Inter Petrindo Inti Citra, a company 99.6 percent owned by Pangestu, for $219 million, and will buy a 55.4 percent stake in Chandra Asri from two Malaysia-based companies, Strategic Investment Holdings and MIH.
Barito had said that its Singapore-based affiliate, Magna Resources Corporation Pte Ltd, will buy any shares from the rights issue that are not taken up by shareholders.
Barito Pacific, which mainly produces plywood products, has a total stock market value of about $1.29 billion. Its share price has jumped more than six times so far this year.
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