Jakarta. Rimo International Lestari, a listed department store operator, seeks to raise up to Rp 8.1 trillion ($610.7 million) from a pre-emptive rights issue in order to buy out property developer Hokindo Mediatama, hinting a possible backdoor listing of the property company.
In an official statement on Monday, the Jakarta-based company — formerly known as Rimo Catur Lestari — said that it's planning to issue 30.6 billion new shares with a nominal value of Rp 250 a piece.
Each shareholder will be entitled to 90 new shares, offered at price of Rp 265 each, the statement said. Shareholders who don't participate will see up to 98.9 percent of its ownership diluted after the rights issue, while Singaporean investment firm Haven Capital will be acting as the standby buyer, according to the statement.
Funds from the new shares sales will be used almost entirely to acquire a 99.98 percent stake of Jakarta-based Hokindo Mediatama, and also to later inject more capital into the company.
Hokindo Mediatama, whose 99.99 percent is currently controlled by Fajarindah Megah Perkasa, has experience in developing property — from malls and apartments to residential blocks — within integrated townships across Indonesia, including Jakarta, Banten and Kalimantan.
Following the acquisition, Rimo's total asset will jump to Rp 8.81 trillion from the current Rp 17.69 billion.
Analysts are speculating that the planned acquisition is a way for Hokindo Mediatama to list on the local bourse without an initial public offering, given the quantity of the transaction and the different line of business that both companies operate.
"Also, [Rimo] is planning the rights issuance and acquisition at a time when its financial performance and expansion plans are declining," said Reza Nugraha, an analyst at MNC Securities, adding that he believed the transaction would be beneficial for both companies.
Rimo posted a net loss of Rp 868 million in the first quarter, compared to Rp 1.1 trillion in the same period last year, while revenue declined by 25 percent to approximately Rp 20 million.