Friday, August 19, 2011

Jababeka (KIJA) right issue price at IDR 250 per share

Jababeka will issues 6bn new shares at IDR 250/share or equivalent to IDR 1.5trn. Every 500 old shares deserves for 219 new shares. The proceeds will be used to acquired stakes in PT Banten West Java Tourism Development (BWJ) and PT Tanjung Lesung Leisure Industry (TLLI).
Comments: The earnings dilution after right issue is 30%. Following the acquisition, the company will have additional recurring based income from this new hospitality business. We have yet get the detail or NAV of these assets but we believe the risk will be the execution risk since company doesn’t have any experience in resort or hospitality business.(Bisnis Indonesia)

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