Jakarta. Listed department store operator Rimo International Lestari has reduced the size of a rights issuance by almost half in its latest attempt to revive a plan to transform itself into a property business.
Rimo International, formerly known as Rimo Catur Lestari, is now offering 40.59 billion new shares at Rp 101, which would see the company raise Rp 4.1 trillion ($307 million) in fresh capital, it announced on Wednesday (25/01).
This compares to an earlier plan to raise Rp 7.5 trillion from a rights issuance in December 2015, or the original Rp 8.1 trillion in August of that year. The company at the time failed to secure approval from the Financial Services Authority (OJK) to conduct the transaction.
According to the company's earlier prospectus released on Jan. 23, at least 97.28 percent, or an equivalent of Rp 3.9 trillion, of the proceeds will be allocated towards the acquisition of a 99.98 percent stake in property developer Hokindo Properti Investama.
Rimo will use the remainder of the proceeds to beef up Hokindo capital and as working capital, in addition to debt repayment.
The size of the deal and the stark contrast in the nature of Rimo's and Hokindo's businesses have led analysts to suspect that the rights issuance and acquisition plan may be a backdoor listing attempt by Hokindo.
Hokindo Properti's business portfolio includes malls, apartments and residential blocks in integrated townships, mainly in Jakarta, Banten and Kalimantan.
The department store operator, established in 1987, is currently in a shamble.
It booked Rp 99 million in sales in 2015, only a fraction of the Rp 5.5 billion the company made three years earlier. As of September, its equity stood at minus Rp 66 billion.
Rimo will hold a general shareholder meeting on Friday to seek approval for the plan.