Metallurgical coal group Cokal Limited has been advised by PT Cakra Mineral Tbk (CKRA) that an underwriting agreement has been entered into for the US$100 million rights issue which is a key part of its takeover bid for Cokal. CKRA intends to raise approximately US$100 million by way of a rights issue fully underwritten by PT Sinamas Sekuritas.
CKRA advises that the underwriting agreement is in customary form and normal terms for transactions of this size and type in Indonesia. It also advises that its largest shareholder, Redstone Resources, is a part to the agreement, indicating its intentions in relation to the shareholders meeting as part of the rights issue process.
Cokal and CKRA announced on April 29, 2015, that they had entered into a Bid Implementation Agreement under which CKRA will make a conditional off market takeover bid for all the shares in ASX-listed Cokal.
PT Sinamas Sekuritas is a subsidiary of PT Sinar Mas Multiartha, the investment holding company for Sinar Mas Group, one of the largest conglomerates in Indonesia. The underwriter is a leader in financial services that includes fund management, investment research, stock brokering, bonds and other derivative products to retail, corporate and institutional customers.
By obtaining the underwriting agreement CKRA has achieved a significant milestone which is in line with the timetable outlined in the Bid Implementation Agreement.
Cokal chairman and CEO Peter Lynch said, “This is a very encouraging development and we are happy with the progress we have made to date. The two parties are working steadily in a cooperative manner as we proceed through the detailed work required in the Bid Implementation Agreement.”
Meanwhile, Cokal has announced a private placement in the company to Cedrus Investments which will raise Aus$2.5 million before costs. The placement will be completed within Cokal’s placement capacity with no shareholder approval required. It was consented to by CKRA and does not change the offer price of their takeover bid.
Cedrus manages a global portfolio of proprietary direct investments in China, South East Asia, Central Asia, Australia and Africa, primarily in the natural resources, commodities, clean-tech and life sciences sectors.
Cedrus, along with Platinum Partners, has provided Cokal with a non-binding term sheet in relation to a US$110 million project finance facility for the BBM coal project in Central Kalimantan.