GIAA and KRAS Mandatory Convertible Bond. Two state-owned companies, namely PT Garuda Indonesia Tbk (GIAA) and PT Krakatau Steel Tbk (KRAS) will soon hold an Extraordinary General Meeting of Shareholders (EGMS) in November. The EGMS event is relate to the plans of the two state-owned companies.
That will receive an injection of funds from the government, through the mechanism of issuing Mandatory Convertible Bond (MCB). Garuda will issue MCB with a value of Rp 8.5 trillion and Krakatau Steel worth Rp 3 trillion. In the disclosure of information release on the Indonesia Stock Exchange (IDX).
The GIAA EGMS will be held on November 20, 2020. The agenda for this meeting will only be submit later after being propose by the company’s shareholders. Furthermore, KRAS EGMS will be held on November 24, 2020. Summons to the EGMS will be held on November 2. The company has yet to submit an agenda for the meeting, pending input from shareholders.
However, the company has submit a plan to issue OWK and additional capital without giving a private placement. The value of the OWK to be issue is IDR 3 trillion. The bonds will later be convert into company shares with the conversion price referring to 90% of the average closing price.
Of the shares within 25 trading days on the regular market or one day before the conversion date, whichever is lower. Shareholders’ approval of this plan will be request at the schedule EGMS. Deputy Minister of BUMN Kartika Wirjaatmadja previously explain that the current most likely scheme.
The scheme is to use a two-step loan through PT Sarana Multi Infrastruktur (Persero) / SMI. Later the government will channel funds to this company, then SMI will buy the MCB issued by Garuda and KRAS. So, for example, SMI, the current discussion for PT KAI and GIAA will be using SMI.
Where the government will invest or place funds in SMI, then SMI will purchase the MCB GIAA or provide working capital loans to KAI. So it is a two-step loan and this is not final yet, still a process, said Kartika.