JAKARTA - PT Smartfren Telecom Tbk (FREN), one of the largest telecommunication companies in Indonesia, plans to issue 7 billion new shares by providing Pre-emptive Rights or a rights issue.
James Wewengkang, Corporate Secretary of FREN, explained that the new shares to be issued were common shares, as Series C, with a nominal value of IDR 100 per share. To continue this corporate action, FREN management will ask for approval from the Extraordinary General Meeting of Shareholders (EGMS) on March 2, 2021.
The purpose of the rights issue, said Wewengkang, was to improve the financial condition of the company and its subsidiaries. "The rights issue will have a positive effect on the consolidated financial condition of the company and its subsidiaries, including improving the capital structure and increasing cash for working capital purposes," he said through an information disclosure on the Indonesia Stock Exchange.
In the prospectus of the public offering that has been issued, FREN Management also said that the shares, owned by the old shareholders, would be diluted by maximum of 37.6%, if they did not take part in the rights issue.
According to idnfinancials.com data, 30.3% of FREN's shares are controlled by PT Global Nusa Data by January 29, 2021. Then, 18.5% are owned by PT Wahana Inti Nusantara, 12.3% by Bali Media Telekomunika, 12.2% by PT Dian Swastatika, and the remaining 26.7% by public investors. (KR/VA)