Jakarta. Listed department store operator Rimo International Lestari has cut down the size of its delayed rights issue to approximately Rp 7.5 trillion ($531 million) from its initial plan to raise Rp 8.1 trillion of funds amid lingering uncertainty in the stock market, according to a filing on the local stock exchange on Monday.
In its prospectus, the company is now offering some 28.4 billion shares, down 7 percent from the previous plan to issue 30.6 billion shares, at Rp 265 each.
Each shareholder is now entitled to 83.5 new shares as of February next year, compared to its initial plan to offer 90 new shares in October, according to the prospectus.
The company has also pushed back its planned rights offering to February next year from last September, awaiting approval from the extraordinary shareholders' meeting scheduled on Jan. 29, the prospectus said.
"At least 77.45 percent of the rights offering proceeds will be spent to acquire a 99.998 percent stake in property developer Hokindo Mediatama from Fajarindah Megah Perkasa and 21.42 percent will be used to inject capital at Hokindo," the company said in the prospectus, adding that the remainder will be used to pay for Rimo's working capital.
The management of Rimo, whose rights issue plan has been speculated to be a backdoor listing attempt by Hokindo, did not disclose why it had chosen to trim the size of its rights offering or delay the plan until next year. Still, the listed retailer is not the first company whose fundraising plans were hampered this year against the backdrop of a volatile global market and an economic slowdown.
The country's main stock index, the Jakarta Composite Index (JCI), declined 0.44 percent to 4,374.2 on Monday, slumping by 16 percent since the beginning of the year.
Rimo previously reported Singapore's Haven Capital as the standby buyer for the shares sale if shareholders choose not to exercise their rights, however it did not specify a particular standby buyer in its latest prospectus.
Jakarta-based MarkAsia Strategic is appointed to advise on the sale.