SINGAPORE, April 10 (Reuters) - Singapore-listed United Fiber System (Unifiber) (UFSL.SI: Quote, Profile, Research) plans to raise about $225 million for expansion by selling convertible bonds and shares in its Indonesian unit, a source close to the deal said on Thursday.
The source, speaking to Reuters on condition of anonymity, said the funds raised would cover 25 percent of the cost of building a pulp mill in Indonesia.
The source did not give details on the convertible bonds issue and share sale.
Unifiber, which does construction and forestry, said in February it had entered into an agreement with China MCC20 Construction (MCC20), a unit of state-owned investment firm China Metallurgical Group Corp, to build a $863 million pulp mill in Indonesia.
But the cost of the mill has increased to $900 million, due to the euro's appreciation against the U.S. dollar, as most of the equipment was purchased from Europe, the source said.
Unifiber would obtain the remaining $675 million from MCC20 in the form of a cash loan to be repaid over 10 years, the source added.
The proposed bleached hardwood kraft pulp mill in South Kalimantan has a production capacity of 600,000 air dry tonnes per year, the company said. (Editing by Jennifer Tan)
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