capital after Public Offering, the Company on behalf of other founding shareholders will record 5,000,000,000 five billion
shares, therefore the number of shares listed in the Indonesia Stock Exchange after this initial Public Offering will be
5,882,353,000 five billion eight hundred and eighty two million three hundred and fifty three thousand shares or 100
one hundred percent from all issued and fully paid share capital.
The Company does not intend to issue or record other shares andor other instruments that could be converted into
the shares for a period of 12 twelve months following the date of this Initial Public Offering will become effective. If
in the future the Company intends to do so, the Company will follow all applicable provisions andor regulations.
4. Plan on Use of the Proceeds
All the proceeds from this Public Offering after deducted for the share issuance cost will be used as follows:
1. About 65 will be used by the Company starting in 2011 until no later than year 2015 for capital expenditure and
coal mining facilities and infrastructure development costs to support the expansion plans of subsidiaries,
i.e.:
Approximately 80 will be used for capital expenditure and facilities and infrastructure development costs of
coal mining of BIB in South Kalimantan which are, among others, to increase the capacity and a new port
development, construction and repair coal haul road in andor from the mining location to the port area,
including costs required for land acquisition and licensing and other facilities.
Approximately 15 will be used for capital expenditure
and facilities and infrastructure development costs of coal mining of KIM in Sumatera which are, among others
to increase the capacity and a new port development, construction and repair coal haul roads in andor from
the mining location to the port area, including costs required
for land
acquisition and
licensing, construction of the mess and workshop, the purchase of
mining equipments and other facilities.
Approximately 5 will be used for capital expenditure and facilities and infrastructure development costs of
coal mining of TKS in Central Kalimantan which are, among others to the port development, including costs
required for land acquisition and licensing, exploration opening area cost, additional drilling cost, cost for
the making of mining plan and other facilities. 2. Approximately 25 will be used by the Company in the
period 2011-2012 for The Company’s and its subsidiaries’ working capital, which are as follows:
Approximately 10 will be used for the Company’s working
capital, among others for sale and purchase of coal and other operational costs.
Approximately 35 will be used for the working capital
of BIB, which among others include mining contractor cost, fuel cost, cost for replacement and maintenance of
heavy equipments’ spare parts, and other operational costs.
Approximately 50 will be used for the working capital
of KIM, which among others include mining contractor cost, fuel cost, cost for replacement and maintenance of
heavy equipments’ spare parts, and other operational costs.
Approximately 5 will be used for the working capital of
TKS, which among others include mining contractor cost, fuel cost, cost for replacement and maintenance of heavy
equipments’ spare parts, and other operational costs. 3. Approximately 10 will be used by the Company in 2011 to
pay some debts and the Company’s obligations to parties related to the Company. Under the Credit Agreement dated
December 2, 2010, the Company obtained a loan facility for business development from DSS that is the Companys major
shareholder, with a maximum loan of USD 22.6 million at 8 interest per annum with maturities up to December 31, 2011
which might be extended by written agreement of both
parties. Based on the Addendum dated March 24, 2011, the previous loan facility increased from initially amounted
to USD 22.6 million to become USD 100 million. The Company may pay back some or all of the principal debt before the
expiry of the loan period without fine or penalties. As of November 3, 2011, the balance of the Companys loan to DSS
amounted to USD 39.1 million. Funds used for the capital expenditure and coal mining
facilities and
infrastructure development
costs and
Subsidiaries’ working capital, will be provided by the Company
through the
mechanism of
increased equity
participation andor granting of loan. In the event that the funds provided in the form of loans
to the subsidiaries, then after repayment of loan the funds will be used by the Company for the Company’s
working capital which are, among others, for selling and purchasing of coal and other operational costs.
Details about the plan on use of the proceeds from the Initial Public Offering can be seen in Chapter II of this Prospectus.
5. Business Risks
