Securities company Mandiri Sekuritas has revealed a big corporation action plan by PT Trimegah Bangun Persada (NCKL) or Harita Nickel that will be financed by the proceeds of a private placement or rights issue.
According to Mandiri Sekuritas, Harita Nickel plans to increase its shareholding in PT Obi Nickel Cobalt (ONC), a high-pressure acid leach (HPAL) nickel smelter. Harita Nickel will also acquire nickel mines.
“NCKL (Harita Nickel) will increase its shareholding in ONC to 40 percent from the current 10 percent by acquiring 30 percent of the shares owned by the Harita Group,” Mandiri Sekuritas wrote in its report, as quoted by investor.id on Tuesday, February 20, 2024.
NCKL also plans to acquire other nickel mining assets on Obi Island in Halmahera to secure long-term nickel ore supply.
For reference, ONC is involved in the HPAL smelter project with an annual production capacity of 65,000 tons of mixed hydroxide precipitate (MHP), including 75,000 tons of cobalt.
In addition to ONC, NCKL also has exposure to other HPAL projects through its 45 percent interest in the Halmahera Persada Lygend (HPL) smelter. HPL has a total capacity of 55,000 tons of MHP, including 67,000 tons of cobalt, which can be converted to nickel sulphate and cobalt sulphate if the margin is better than MHP.
In terms of fundraising, NCKL has the option to issue 6.3 billion new shares, or 10 percent, through a non-HMETD capital increase or private placement. The potential dilution is 9.09 percent.
“Harita Jayaraya’s shareholding will be reduced from 86.48 percent to 78.62 percent and the public shareholding will be reduced from 12.65 percent to 11.5 percent, leaving 9.09 percent for potential investors,” Mandiri Sekuritas said.
In doing so, NCKL’s management hinted at a potential collaboration with new strategic investors, as well as a commitment to increase its exposure to key materials for electric vehicle battery raw materials and expand its market outside China.
NCKL also has the option to launch a limited public offering (LPO) with a rights issue of 18.92 billion new shares, or 30 percent. The maximum potential dilution from the rights issue, if shareholders do not exercise their rights, is 23.08 percent.
To facilitate its jumbo corporate action, NCKL will seek shareholder approval at an Extraordinary General Meeting (EGM) on March 15, 2024.
