Working Capital and Investment Loans from the Company to the Company's Subsidiary
On 17 October 2023, the Company has funded the Company’s subsidiary in the amount of USD300,000,000 or its equivalent amount in Rupiah (“Transaction”) to fund the investment of the Company’s subsidiary in PT Blue Sparking Energy, a limited liability company duly established under the laws of the Republic of Indonesia and engaging in the nickel processing and refinery business (“BSE”).
BSE is currently developing a high-pressure acid leaching project located in the Indonesia Weda Bay Industrial Park in Central Halmahera Regency. The project is designed to produce nickel-cobalt hydroxide intermediate product (MHP – Mixed Hydroxide Precipitate) with an annual nameplate production capacity of approximately 67,000 tonnes (±10%) of nickel equivalent and approximately 7,500 tonnes (±10%) of cobalt, together with its supporting facilities and infrastructure (the “Project”).
The flow of funds for the Transaction from the Company to its subsidiary for the purposes of development and construction of such Project is funded by the Company as a loan to PT Harum Nickel Perkasa (“HNP”) and subsequently, HNP provides the funding to PT Tanito Harum Nickel (“THN”). Furthermore, in accordance with the purpose of the Transaction which is to fund the investment of the Company’s subsidiaries in the Project developed by BSE and by referring to the Disclosure of Information published by the Company on 2 October 2023 which stated that THN and BSE had entered into a Loan Facility Agreement on 29 September 2023 in relation to the provision of a loan facility from THN to BSE in the amount of up to USD500,000,000 or its equivalent amount in Rupiah, the fund from the Transaction received by THN is then lent to BSE as part of the loan withdrawn by BSE based on such Loan Facility Agreement.
The Transaction constitutes a material transaction for the purposes of Financial Services Authority Regulation No. 17/POJK.04/2020 regarding Material Transactions and Change of Business Activities (“POJK 17”), with a transaction value of more than 20% of the equity of the Company. As for the parties under the Transaction, HNP and THN, both are controlled entities which shares are directly and indirectly owned at least 99% by the Company. Therefore, pursuant to the provisions of POJK 17, the Transaction is not subject to the use of Appraiser as set out under Clause 6 paragraph (1) letter a. and is not required to obtain approval of the general meeting of the shareholder of the Company as set out under Clause 6 paragraph (1) letter d. of POJK 17.
Furthermore, the Transaction is a form of investment within the scope of the main business activities of each of HNP and THN based on its articles of association as implementation of the holding company activities to generate revenue and is carried out continuously for meeting the working capital requirement and investment of the relevant Company’s subsidiaries.
There is no material impact from the Transaction toward the operational activities, legal or business continuity of the Company. While the impact to financial condition of the Company can be referred to the information conveyed based on the Disclosure of Information published by the Company through the Company’s website and Indonesia Stock Exchange’s website on 2 October 2023.