Darma Henwa Plans Private Placement of 5.87 Billion Shares

PT Darma Henwa Tbk (DEWA) plans to issue new shares without pre-emptive rights or a private placement of 5.87 billion shares. This corporate action was carried out after obtaining shareholder approval at the extraordinary general meeting of shareholders (EGMS) on January 27, 2021. Based on the disclosure of information, Thursday (14/1), the company will issue 5.87 billion series B common shares at an exercise price of Rp 60 per share, so the company has the potential to reap fresh funds of up to Rp 352.24 billion. All series B shares issued will be used to settle the company’s obligations to the lender. Thus, the company’s capital structure is better with a lower debt-to-equity ratio.

In addition, completing the study will reduce financial burdens, thereby increasing profitability. Based on the company’s consolidated financial statements as of June 30, 2020, Darma Henwa has a maturing obligation of US $ 23.80 million to Highrank Investment Limited (HI). HI is the company’s creditor based on the receivables transfer notification letter dated 4 November 2019. Then, HI received the transfer from READ Finance Company Ltd for the right to collect a total of US $ 23.80 million from the Company based on the debt recognition agreement dated 27 December 2018.

In connection with this action, HI has submitted a demand of payment on July 14, 2020, because until that date Darma Henwa has not fulfilled the payment obligation in debt recognition which should have been made on July 1, 2020. On September 21, 2020, the company and HI entered into a settlement agreement on the company’s obligations to HI, such as stipulating that the principal of the facility amounting to US $ 23.80 million will be completed through a payment scheme not later than January 5, 2021 or the conversion of the entire principal of the facility into shares. usual series B of the Company with the calculation of debt into rupiah currency at the agreed exchange rate of Rp 14,800 per US $ 1. establishes cooperation Previously, the company had signed a cooperation agreement with a tire company from China, Fujian Haian Rubber Co Ltd. This collaboration is carried out to increase the productivity of heavy equipment in mining operations.

Vice President Director of Darma Henwa Prabhakaran Balasubramanian said this collaboration will last for five years. In this tire management agreement, Fujian Haian Rubber through its business entity, PT Luan Tire Indonesia, will provide all tire needs for heavy equipment in the Darma Henwa coal project. “The coal projects in question are located in Bengalon, East Kalimantan, Asam Asam and Satuni-Senakin in South Kalimantan,” he explained in an official statement. This tire management agreement includes procurement, installation and maintenance of tires as well as routine training on tire use and supervision of Darma Henwa operator operational activities.

Balasubramanian hopes that through this collaboration, Fujian Haian will provide standard tire costs and reduce Darma Henwa’s burden in tire management which reaches 30% of the total cost.