Vale Indonesia (INCO) to Hold Rights Issue Following Divestment to MIND ID

ISSUER NEWS - JAKARTA. PT Vale Indonesia Tbk (INCO) will do Capital Increase by Giving Preemptive Rights (PMHMETD). This rights issue is part of the INCO divestment carried out by PT Mineral Industri Indonesia (Persero) alias MIND ID.

INCO plans to conduct a rights issue by issuing as many as 603,445,814 (603.44 million) new shares with a nominal value of Rp 25 per share. These new shares will be issued from INCO's portfolio shares and will be listed on the Indonesia Stock Exchange (BEI) in accordance with the law.

In connection with this action, INCO will hold an Extraordinary General Meeting of Shareholders (EGMS) on Friday, April 19, 2024 at 15:00 WIB.

"The company has the right to issue part of or all of the maximum number of shares approved to be issued based on the EGMS decision. The deposit for shares in this PMHMETD is planned to be made in cash," explained INCO Management in the disclosure of information, Wednesday (13/3).

INCO management asserts, this PMHMETD is part of the implementation of the obligation to divest shares to the Government of the Republic of Indonesia. The government has appointed MIND ID to carry out the takeover of INCO shares related to the obligation to divest these shares.

Based on information obtained from INCO's main shareholders, namely Vale Canada Limited (“VCL”) and MIND ID, it is known that:

1. MIND ID will

buy and receive a transfer from VCL, Sumitomo Metal Mining Co. Ltd. (SMM) and Vale Japan Limited (VJL) for all HMETD that will become their portion in the rights issue.
carry out all of these HMETD and HMETD that will become MIND ID's portion in the rights issue (new share transactions) based on the definitive agreement related to the divestment signed by VCL, MIND ID and SMM effective since February 26, 2024.

2. Along with the new share transaction, MIND ID will buy and receive a transfer of some shares owned by VCL, SMM and VJL in INCO (old share transaction) as part of the implementation of the obligation to divest shares to represent the government.

After the completion of the new share transaction and the old share transaction (takeover transaction), MIND ID will acquire an additional 14% of shares, thus becoming the largest single shareholder in INCO with a share ownership of at least 34%.

3. After the completion of the takeover transaction, MIND ID and VCL will become joint controllers (joint controller) directly in INCO.

In general, INCO plans to use the funds it receives from the rights issue (after deducting all commissions, costs, expenses and other expenditures) for two purposes. Namely for capital expenditure needs and/or working capital needs by INCO.

"The company estimates that the PMHMETD plan can strengthen the capital structure in business development or mining management activities which are part of the main business activities, so it will have a positive impact on the company's financial condition," wrote INCO's disclosure of information.

With the implementation of the rights issue, INCO shareholders who do not use HMETD will be diluted on the percentage of share ownership up to as much as 5.73% if all HMETD issued is carried out by the entitled HMETD holders.

Just a reminder, on February 26, 2024, the State-Owned Mining Holding MIND ID along with VCL and SMM have agreed on the terms and conditions for the acquisition of INCO shares by MIND ID equivalent to about 14% of the total ownership of INCO shares.

The agreed share price in this transaction is Rp 3,050 per share. The composition of INCO holders after the agreement is MIND ID at 34%, VCL at 33.88%, SMM at 11.48% and Public at 20.63%.

From the side of stock movement, in trading on Wednesday (13/3) INCO's price strengthened by 7.77% to the level of Rp 4,300 per share. This result cuts the trend of INCO's price weakening year to date, which now reflects a slight decrease of 0.23%.