A worker was supervising the construction process of a new polyethylene plant in Chandra Asri Petrochemical's integrated petrochemical complex in Cilegon, Banten, on June 18, 2019 - Illustrative image (Source: Antara News) CAP, Indonesia's largest integrated petrochemical companyproducing olefins and polyolefins, has selected Thai Oil Public Company Limited(Thaioil) as its chosen strategic investor, the company said in a pressstatement.
The two enterprises have signed definitive agreements toproceed with a capital increase in CAP via a Pre-Emptive Rights Issue, to befiled with the Financial Services Authority of Indonesia (OJK).
The investment in CAP will be made via Thaioil's designated subsidiary,which will act as the standby buyer to underwrite a successful transaction.
CAP’s major shareholders, Barito Pacific and SCG ChemicalsCo., Ltd. (SCG Chemicals), fully support this corporate action to inject equityinto CAP.
The net proceeds will be used for the development andconstruction of CAP's second world-scale integrated petrochemical complex byits subsidiary, PT Chandra Asri Perkasa (CAP 2), which will comprise, amongothers, a cracker unit, polymerized olefins, as well as related facilities andutilities.
This is in line with CAP's strategy to expand its productioncapacity and business scale to serve the needs of the Indonesian market.
The total estimated investment from Thaioil obtaining a 15 percent shareholdingstake in CAP after the rights issue, and SCG Chemicals retaining approximately30.57 percent of its shareholding stake in CAP, is up to 1.3 billion USD.
The transaction is still subject to regulatory approvals,including from the OJK, and is expected to be completed no later than September30. It will be one of the largest rights issue ever conducted on the IndonesiaStock Exchange (IDX).
Subject to a successful Final Investment Decision (FID) onCAP 2 targeted for 2022, Thaioil and SCG Chemicals may further collectivelyinvest up to 400 million USD.
Investment in CAP 2 is projected to be some 5 billion USD.Construction is expected to take four to five years, creating 25,000 jobs overthe period. It will double the company's production capacity from the current4.2 million tonnes per year to more than eight million tonnes per year.
This will help fulfil Indonesia's growing domestic demand,reduce dependency on imports, develop the country's local downstream petrochemicalindustry, support the government's vision for Industry 4.0, and createhigh-value long-term careers, CAP noted in the press statement./.
VNA
