Following up on news reported yesterday with regards to ELTY fund support from Sociate Strasbrough (SS)on their 51% Bukit Jonggol (BJA)acquisition plan,the company spoke with us that the deal with SS is on profit sharing where SS will get 25%of EBIT generated from BJA project.On the Rp900bn loan,it is non-interest bearing payable within 2 years.SS is also afforded a debt to equity conversion on BJA level,if ELTY does not fully repay the said loan.
Based on the confirmation,this mellowed down our cash flow concerns on ELTY ’s ability to pay additional interest expenses.Additionally,ELTY is expected to recognize the toll road expenses (i.e.,interest and depreciation)in 2H10, which would squeeze 2H earnings.Thus,our 2010 net profit Rp36bn remains intact.
We still have a buy on ELTY with TP:Rp200/share,currently trades at 72%discount to NAV10F.
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