Capital Increase Without Pre-emptive Rights IV

Hello All,

We have come to the final discussion on the above topic which will be on the requirement for shareholders approval with regard to the debt to equity conversion and part of the Capital Increase Without Pre-emptive Rights.

Well, as requested under the capital market authority, this kind of transaction is subject to shareholders' approval. The procedure for the EGM is basically the same as in any corporate actions in which EGM Announcement should be done 14 days prior to the EGM Notice and the EGM Notice must be done 14 days prior to the EGM.

One thing to note for the creditor about the debt to equity conversion is about the lock up period. Those creditors that receives the shares in consideration of the debt converted must be subject to a lock up period of 1 (one) year from the moment the shares are listed on the exchange. This is regulated under the Exchange and intended to mitigate sudden significant decline in the share price of such company following the provision of the shares to creditors especially considering the size of the shares issued which at times can be substantial and more than the existing shares. For example: the debt to equity conversion conducted by Langgeng Makmur Industry and Sekar Laut in 2005 where the shares outstanding in the market suddenly increase by 91% and 814% due to such undertaking. On the debt to equity conversion by Surabaya Agung in 2007 the outstanding shares increased by close to 1,100% from the existing outstanding shares.

Okay now. Seems we have covered some issues on the debt to equity conversion. lets see if we can discuss other more interesting matters in the coming weeks.

Chao....
SS