Chandra Asri, Tri Polyta merger on track after approvals

26 October 2010 06:06  [Source: ICIS news]

SINGAPORE (ICIS)--Indonesian business regulators have approved the merger between Chandra Asri and Tri Polyta Indonesia – on track for completion by 1 January 2011 – a source from one of the companies said on Tuesday.

“The deal could be completed as early as December, but we are looking at 1 January [2011] as a more realistic target,” said the source.

The proposed merger, which would create a new $1.5bn (€1.08bn) company called Chandra Asri Petrochemical, was given approval from the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) on 21 October this year, according to a statement by Tri Polyta.

The country’s Commission for the Supervision of Business Competition (KPPU) also granted permission on 30 September for the merger to go through, the statement added.

The KPPU had earlier called upon Chandra Asri and Tri Polyta to elaborate on the merger, as it was seen as creating a monopoly in the industry, according to the Tri Polyta statement.

However, a meeting on 30 September between the two sides revealed that the deal would involve vertical integration between the two companies and would not create a monopoly in the petrochemical sector, the statement said.

Through a stock swap mechanism, Tri Polyta set its share price at Indonesian rupiah (Rp) 3,579 ($0.40) while Chandra Asri’s was priced at Rp 152,664.53 per share.

The merger was expected to generate total sales of Rp17,000bn–20,000bn a year, according to Tri Polyta.

Meanwhile, a general meeting of shareholders was scheduled to be held on 27 October to determine the final outcome of the proposed merger, the source added.

Tri Polyta and Chandra Asri share a common shareholder in Barito Pacific, which owns 77.9% of Tri Polyta and 70% of Chandra Asri.

Tri Polyta operates a 360,000 tonne/year polypropylene (PP) plant at the Petrochemical Industrial Estate in Cilegon, Banten province, while Chandra Asri runs a 600,000 tonne/year naphtha cracker in Cilegon. The unit is the only cracking facility in Indonesia.

($1 = Rp8,905; €0.72)

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By: Nurluqman Suratman

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