JAKARTA. PT Pelangi Indah Canindo Tbk (PICO) will convert its debts to Eternal Nation Capital Limited (ENCL) to equity through a capital raise without pre-emptive rights or private placement.

The management of PICO said that the company owed ENCL IDR 406.88 billion, according to the bilateral agreement made in 2021. Throughout 2022, the company had paid IDR 2.58 billion back.

“Therefore, on December 31, 2022, the obligations were down to IDR 404.29 billion,” the management of PICO mentioned in the information disclosure.

In order to pay off some of the debts, PICO will convert the debt to equity through a private placement. The amount of debt that will be converted to shares clocks up to IDR 173.37 billion.

However, PICO will ask for approval first from the shareholders during the General Shareholders Meeting in June 2023, regarding the debt-to-equity conversion and the private placement. Should the shareholders agree, the obligations owed to ENCL will shrink to IDR 230.92 billion.

For the record, PICO’s plan to convert its obligations to shares follows the declining financial performance during the COVID-19 pandemic. The demands for the company’s products have yet to recover and bounce back to the initial target. Thus, the company believes that this upcoming debt conversion is beneficial in improving its financial performance in the future. (KR/ZH)