Indonesia's Lippo Karawaci to raise $1 bln in funding, appoints new CEO -statement

Lippo China Resources

12/03/2019 05:15

JAKARTA, March 12 (Reuters) - Indonesian property developer
Lippo Karawaci  LPKR.JK  said in a statement on Monday it
planned to raise $1 billion in new funding through a rights
issue and the sale of assets, and had also appointed John Riady
as its new chief executive. 
    The company, which recently faced liquidity issues and an
alleged bribery case, is the flagship real estate developer of
the Lippo Group  0226.HK , operated by the billionaire Riady
family. The Riady family has proposed underwriting a $730
million rights issue as part of the funding. 
    Lippo Karawaci said the rest of the funds will come from
$280 million in proceeds from asset divestment plans, including
a transfer of its Puri Mall holding to Lippo Malls. 
    The funds will be used for "partial repayment of debt
obligations ... a liquidity buffer for interest and real estate
investment trust obligations, and continued investments in
existing key projects," Lippo Karawaci said.
    The rights issue will be voted on at the company's annual
general meeting of shareholders in April, with a price proposed
at 235 rupiah (1.7 U.S. cents) per share. 
    Lippo Karawaci's stock dropped to 246 rupiah per share
following the statement, its lowest since December 2018. 
     The company said it had changed its management and board of
commissioners, naming Lippo Group Director John Riady - grandson
of the group's founder Mochtar Riady - as its new top executive.
    Lippo Karawaci was investigated by Indonesia's anti-graft
agency in October, part of a bribery probe into Lippo Group's 
$21 billion Meikarta real estate project, of which the developer
owns 54 percent. 
    A spokesperson for Lippo previously told Reuters that there
was no tolerance for corruption at the company and that they
were cooperating with investigators. 
     The property developer, also announced a cash tender offer
for its dollar bonds due in 2022 and 2026 for up to a maximum
amount of $150 million.  
    Moody's cut the ratings of Lippo Karawaci and its dollar
bonds to B3 in September, while Fitch and S&P rate them at CCC+,
following recent downgrades with negative outlooks. 
    
    ($1 = 14,240.0000 rupiah) 
    

 (Reporting by Fanny Potkin; Editing by Tom Hogue)
 ((f.potkin@thomsonreuters.com;))