Buy
back /Share Repurchase
Based on Indonesian
Company Law, Buyback (Share repurchase) is only allowed for Company to buyback
any issued shares from the shareholder. Buyback shares shall not reduce the
company capital.
Buyback shares can be
performed if the result of the buyback shares does not infringe the following
conditions:
a. The share repurchase does not cause
the value of the Company's net assets to become less than the total issued
capital plus the mandatory capital reserves retained; and
b. the total nominal value of all
shares repurchased by the Company and pledges of shares held by the Company
and/or another Company which shares are directly or indirectly owned by the
Company does not exceed 10% (ten percent) of the issued capital in the Company,
unless otherwise stipulated in the laws and regulations governing the capital
markets;
A direct or indirect share
repurchase that in contrary with the above condition shall be void by law.
Shares repurchased by the Company
may be under the control of the Company for 3 (three) years at the most. Company shall sell the buyback shares to other
party or withdrawn by reducing the capital.
The buyback shares can not be used
to cast votes in the General Meeting of Shareholders and receive the dividend.
Any shareholder has the right to
request the Company to purchase the shareholders’ shares at reasonable price if
such shareholder disapproves the Company’s actions which incur losses to the
shareholders of the Company, in the form of:
a. amendments to the articles of
association;
b. a transfer or pledge of the
Company’s assets with a value exceeding 50% (fifty percent) of the Company’s
net assets; or
c. a merger, consolidation, or acquisition
of the Company.
Tag
long Right dan Drag Along Right
Indonesian Company Law does not stipulate tag along
right and drag along right.
In practice, tag along
right and drag along right may be used for shares transfer. These rights
usually are agreed by the shareholders in the shareholder agreement.
Right
of First Refusal
Right of first refusal
is allowed to be applied based on Indonesian Company Law. This right of first
refusal can be stipulated in the article of association of the Company.
If any shareholder
intends to sell their shares to any party, the selling shareholder shall offer
the other shareholder for the first time in 30 (thirty) days prior offering
date.
The selling shareholder
may sell its shares to the third party, if
the other shareholders do not buy the offered shares from the selling
shareholder in 30 days prior offering date.
Consent
to transfer
Based on Indonesian
Company Law, the article of association of the Company may set forth the
provisions concerning the consent from the following parties as one of share
transfer requirements:
a.
general meeting shareholder, board of
directors, and board of commissioners; and
b.
the competent authorities in accordance
with the applicable laws and regulations.
Absolute
Ban
Indonesian Company
Law prohibit the Company for issuing
shares to be owned by itself or to be owned by another company whose shares are
directly or indirectly owned by the Company.
This provision
regarding prohibition on share ownership shall not be applicable to share
ownership obtained from assignment by law, grant, or testament. Shares obtained
based on the provision should be assigned to another party that is not
prohibited to own Company shares within 1 (one) year after the date of their
acquisition.
With respect to shares
transfer of the Company, foreign investor shall not or invest with limitation
into some Indonesian company. Indonesian Government has stipulated the
limitation for some foreign investor in List of Negative Investment.
For specific industry,
there is some restriction for some party to own shares in the Company governed
by the Government, such as the shareholder of insurance company shall pass the fit
and proper test organized by Financial Service Authority.
