PT Alumindo Light Metal Industry Tbk (ALMI) plans to increase capital without pre-emptive rights (private placement) of as much as 3.026 billion shares at a nominal price of Rp250 per share.

The brief prospectus issued by the company, published on Wednesday (20/1), states that the corporate action plan originated from converting debt from related parties amounting to Rp756.665 billion into an additional paid-up capital company.

The company had used the debt obtained from related parties to pay off loans from creditors (banks and suppliers).

The company will hold an Extraordinary General Meeting of Shareholders to get shareholders' approval for the private placement plan on January 22, 2021. Once the private placement is executed, it dillutes the public shareholders' ownership percentage by 83.09%.

The private placement, stated in the prospectus, was because the company needed a capital restructuring due to declining financial conditions. Alumindo is currently recording negative net working capital and liabilities exceeding 80% of the company's assets.

The realization of the private placement will impact increasing the company's equity by Rp756.665 billion, the current ratio and the ratio of liability to equity, respectively improving to 1.39% and 1.98%.