Estimating UNSP’s reverse stock potentials

JAKARTA. The extra ordinary shareholders meeting of PT Bakrie Sumatera Plantation Tbk (UNSP) finally approved the company to conduct reserve stock. This decision was made after the shareholders conducted the extraordinary meeting for three times. This issuer will conduct the ratio of 10:1.

Under the ratio of 10:1, 10 UNSP’s stocks with the nominal price of Rp 100 per a share would be accumulated to be a share with a nominal price of Rp 1,000. “The reverse stock is necessary to sustain the debts restructuring and fundamentals improvement to raise the company and the shareholders values,” said Andi Setianto, Director and Investor Relations of UNSP, Monday (20/2).

Previously, UNSP had conducted extra ordinary shareholders meetings for two times. However, the meetings failed to meet the quorum so that this plantation issuer decided to conduct the third extra ordinary shareholders meeting.

The third extra ordinary shareholders meeting only required the presence of 19% of shareholders to meet the quorum. On Monday (20/2), about 20.3% of shareholders attended the third extra ordinary shareholders meeting so that the meeting achieved the quorum.

Around 87.1% of attended shareholders agreed on the reverse stock, while the rests were absent or rejected. “We will complete (the reverse stock) immediately in the first semester,” Andi said.

After the reverse stock, UNSP will restructure its debts. This CPO producer will focus on reducing the costs of interest that amount to Rp 600 billion per year. During the nine months of the last year, UNSP had to cost the financial burdens as much as Rp 563.94 billion. Andi expects that UNSP can reduce the costs of interest as much as 50%.

Andi admitted that UNSP will still look for other options to increase the capitals. Andi said that the options might be the rights issue without pre-emptive rights.

As per 30 September 2016, UNSP’s debts amounted to Rp 9.15 trillion, while the matured debts in a year amounted to Rp 5.3 trillion.

Following UNSP, PT Energi Mega Persada Tbk (ENRG) will conduct reverse stock with the ratio of 8:1. Another issuer, ENRG also will conduct reverse stock to restructure debts. ENRG will ask for the approval for the corporate action on 23 March.

As of the end of September 2016, the short term debts and syndication debts of ENRG amounted to US$ 92.19 million and US$ 276.38 million, respectively. About US$ 80.78 million of those numbers will mature in one year.

Aside of the debts component, ENRG also has to settle the tax debt and deferred tax liabilities as much as US$ 244.12 million and US$ 119.45 million.

Analyst at Binaartha Parama Sekuritas Reza Priyambada said that the post-reverse stock performance of the issuers would depend on their own efforts. “It (the performance) would also depend on the market optimism. For an example, after the extra ordinary shareholders meeting, BUMI’s share price has dropped. The positive information about the issuers might support their performance,” Reza told KONTAN, Monday (20/2).

As of September 2016, UNSP revenues had dropped by 27.04% to Rp 1.16 trillion compared with September 2015. During the same period, ENRG revenues dropped by 15.89% to US$ 391.24 million. Reza recommends ‘hold’ for ENRG and UNSP shares.

(Muhammad Farid/Translator)