JAKARTA (Rambu Energy) – The Indonesian Stock Exchange on Monday suspended the trading of PT BW Plantation Tbk shares after its shares plummeted by 51.83 percnt from Rp955 on Sept 6, 2014 to Rp 460 on Sep 26 close.
“Therefore, PT Bursa Efek Indonesia (Indonesian Stock Exchange) suspends the trading OF PT BW Plantation Tbk (BWPT) shares on September 29, as a move for cooling down (of the shares trading),” the exchange said in a statement.
BW Plantation shares dropped sharply after the company set rights issue share price far lower than the market price.
In rights issue prospectus announced last week, BW Plantation announced that it will issue new shares amounting to 17.02 billion unit of shares, representing 85.71 percent of the company’s enlarged capital.
Under the rights issue scheme, each one holder of BW Plantation shares per Nov 20, 0214, will have ar ight to purchase 6 new shares at a price range of Rp390-411 per share, which is far lower than the market price of the BW Plantation shares. The rights issue share price pulled down the company’s shares to the rights issue share price level.
The company’s plan to issue new shares at a lower-than-market price has questioned BW Plantation. In a letter to the Indonesian Stock Exchange Board, BW Plantation has explained rationale behind the price level.
It said the price level (Rp390-Rp411 per share) represents a discount of 15.9 percent-17.2 percent, which is still considered fair because it is still within the range of rights issue precedence worth US$50 million in Indonesia from 2007. (*)