The Mining Company Of Conglomerate Eka Tjipta Widjaja Loaned His Subsidiary IDR 100 Billion

Illustration. (Photo: Unsplash)

JAKARTA - Mining company owned by Sinar Mas Group, PT Golden Energy Mines Tbk (GEMS) through its subsidiary, PT Bungo Bara Utama, has provided a loan facility of IDR 100 billion to another subsidiary of Golden Energy, namely PT Kuansing Inti Makmur.

This loan will be used for capital expenditure and the business development of the subsidiary. The Corporate Secretary of Golden Energy Mines Sudin explained that the loan with an interest rate of 9.5 percent per year will mature on December 31, 2022.

"This loan will be used by Kuansing Inti Makmur for capital expenditures and costs and infrastructure for coal development", said Sudin as quoted from the disclosure of information on the Indonesia Stock Exchange (IDX) website, Monday, February 22.

Bungo Bara Utama is an indirect subsidiary of Golden Energy Mines through Kuansing Inti Makmur. Meanwhile, Kuansing Inti Makmur acts as the holder of 99 percent of Bungo Bara Utama shares.

Still on suspension at the stock exchange

Golden Energy Mines is the mining company boss of the Sinar Mas Group, the late Eka Tjipta Widjaja, whose shares have been suspended by the IDX since January 31, 2018 due to not meeting the provisions for free float shares or ownership of 7.5 percent public shares.

However, the management of GEMS is trying to fulfill this requirement by exercising pre-emptive rights (HMETD) or rights issues to increase the share ownership of public shares and obtain working capital. The corporate action is targeted to be completed by the end of March 2021.

Sudin said that the company held a rights issue to comply with IDX regulations regarding the minimum free float of 7.5 percent shares. Currently, the share of public shares in GEMS is recorded at only 3 percent.

As a result of not complying with Provision V.1 of Exchange Regulation No. IA, GEMS shares have been suspended by the IDX for more than 24 months. Sudin said that the company is still processing the licensing for the corporate action at the Financial Services Authority. The coal mining company has received a second response from the OJK (The Financial Services Authority).

According to him, GEMS has secured the approval of shareholders to issue a maximum of 10 percent of new shares or the equivalent of 588.23 billion shares of the issued and fully paid-up capital in the rights issue.