Bali, November 13th, 2022 – To advance the development of the healthcare industry in Indonesia, state-owned pharmaceutical companies PT Bio Farma (Persero) (“Bio Farma”), PT Kimia Farma Tbk ("KAEF") and PT Kimia Farma Apotek (“KFA”) have signed a strategic partnership with Silk Road Fund (“SRF”) and Indonesia Investment Authority (“INA”). The transformative partnership is in line with the Indonesian government goals of further developing the country’s healthcare industry to bring it to international quality and standards. This strategic investment will take KAEF and KFA as well as Indonesia’s healthcare industry to the next level
This investment collaboration was embodied in the signing of a Conditional Share Subscription and Purchase Agreement and other related transaction documents between KAEF and its subsidiary, KFA with SRF and INA. Total investment is approximately Rp 1,860,000,000,000 for a 40% stake in KFA, subject to closing account mechanics from latest financials report at Completion. The investment will be used towards funding KFA’s strategic business expansion, working capital requirements as well as initiatives to further improve operational efficiency.
Both investors will also participate in the proposed Pre-emptive Rights Issuance transaction at KAEF which was approved through Extraordinary General Meeting Shareholders dated. 14 October 2022 held in Jakarta. KAEF will obtain funding to support its working capital to expand the Company and to improve health services to the Indonesian society.
The signing was carried out at the Indigo Seminyak Hotel, Bali on Sunday (13/11) witnessed by the Vice Minister I of the Ministry of State-Owned Enterprise, Pahala Mansury and President Commisioner Bio Farma, Tanri Abeng. In addition, the representative parties who agreed to this collaboration include the President Director of Bio Farma, Honesti Basyir; the President Director of Kimia Farma, David Utama; the President Director of KFA, Nurtjahjo Walujo Wibowo; the Chairwoman of the Board of Directors of SRF, Zhu Jun; and the CEO of INA, Ridha Wirakusumah.
In his remarks, the Vice Minister I of the Ministry of State-Owned Enterprise, Pahala Mansury, said, this investment collaboration can open up Kimia Farma's access to expertise from global investors.
"Access to global investors will also strengthen the Company's position and improve quality in accordance with international standards," Pahala said.
On the same occasion, the President Director of Bio Farma, Honesti Basyir, mentioned that this investment collaboration will strengthen the working capital structure of Bio Farma Group's direct and indirect subsidiaries. "As a pharmaceutical SOE holding group, Bio Farma supports every tangible form of investment in the development of the healthcare industry in Indonesia," he explained.
The President Director of Kimia Farma, David Utama, stated that the influx of investors will open market opportunities and the Kimia Farma network, both in terms of retail and health services to foreign countries. In addition, the collaboration can improve the capital structure at KFA so that it is able to develop further businesses in the future, and in the long run will increase the value of the Company.
"This investment collaboration will strengthen the Company's capital structure, so as to improve operational and financial performance to deliver better Company performance," said David.
At the same place, the Chairwoman of the Board of Directors of SRF, Zhu Jun, said, “The deal is a key high-quality project cooperation between China and Indonesia under the Belt and Road Initiative and represents an attractive investment opportunity. Through the strong support of the Indonesian government and joint efforts of INA, we look forward to working closely with Kimia Farma’s and KFA’s management in the next phase of the Companies’ development.”
The CEO of INA, Ridha Wirakusumah, underlined, “We feel optimistic this agreement will unleash the potential of the pharmaceutical ecosystem in Indonesia. Kimia Farma Group has a prominent end-to-end presence across its value chain, with more than 1,100 outlets, 400 clinics, and 70 diagnostic labs. We believe the collaboration with SRF sealed in this agreement will support the Company's expansion to increase healthcare access for underserved Indonesians.”
In accordance with INA's mandate, INA plays a role in attracting both domestic and international investment as an alternative to non-debt financing, which is used to support the development of sustainable health businesses in Indonesia. As one of the alternative sources of financing, the involvement of SRF and INA supports the realization of long-term prosperity for all Indonesians.
Credit Suisse, BNI Sekuritas and Mandiri Sekuritas are financial advisers to Kimia Farma and KFA. CLSA is the financial adviser to SRF and INA.
About PT Bio Farma (Persero)
Bio Farma is a state-owned company that produces vaccines, antisera, and other biological products (life science). As a world-class and globally competitive life science company, Bio Farma has implemented various integrated systems and is committed to presenting quality products and innovation as demonstrated by its performance that always refers to international standards and the latest quality management systems. Bio Farma is the Holding Company of three pharmaceutical issuers on the Indonesia Stock Exchange (IDX), namely PT Kimia Farma Tbk (KAEF), PT Indofarma Tbk (INAF), and PT Phapros Tbk (PEHA). For more information, please visit www.biofarma.co.id.
About PT Kimia Farma Tbk
PT Kimia Farma Tbk is a healthcare company with an integrated upstream to downstream businesses in Indonesia. A member of the state-owned pharmaceutical companies, PT Kimia Farma Tbk has several main business fields, namely the development of pharmaceuticals and medicinal raw materials; distribution; marketing; retail pharmaceuticals; laboratories and health clinic. For more information, please visit www.kimiafarma.co.id.
About PT Kimia Farma Apotek
PT Kimia Farma Apotek is a subsidiary of PT Kimia Farma Tbk which is engaged in pharmaceutical retail, especially in the pharmacy sector. There are three business fields run by PT Kimia Farma Apotek and its subsidiaries, which are pharmaceutical retail networks; health clinic services and clinical laboratories. Currently, PT Kimia Farma Apotek has 1,187 pharmacies, 421 health clinics, 72 clinical laboratories, spread throughout Indonesia. For more information, please visit www.kimiafarmaapotek.co.id.
About Silk Road Fund (SRF)
Silk Road Fund is a medium to long term development and investment fund incorporated in China. Through a variety of equity-oriented investment and financing options, Silk Road Fund provides investment and financing support to promote multilateral and bilateral connectivity between China and other countries, as well as their economic and trade cooperation under the Belt and Road Initiative. For more information, please visit www.silkroadfund.com.cn.
About Indonesia Investment Authority (INA)
The Indonesia Investment Authority is Indonesia’s sovereign wealth fund, mandated to increase investment to support the country’s sustainable development and build wealth for its future generations. INA conducts investment activities and collaborates with leading global and domestic investment institutions in sectors that strengthen Indonesia's advantages and provide optimal returns. For more information, please visit www.ina.go.id.