I Made Sentana
\nDow Jones Newswires
\nJakarta<\/p>\n
Indonesia's shipping company PT Berlian Laju Tanker plans to
\njoin a growing list of local companies by issuing bonds overseas
\nin the next two years to expand its business.<\/p>\n
Berlian's finance director Kevin Wong told Dow Jones Newswires
\nin an interview that the company needs to raise between US$300
\nmillion and $400 million in the next two years to enlarge the
\ncompany's fleet.<\/p>\n
In the past, Berlian has borrowed mostly from overseas banks,
\nbut is now looking to diversify its funding. It has never issued
\noverseas bonds.<\/p>\n
\"We are looking at new ways to access the capital market,\"
\nWong said.<\/p>\n
Several blue-chip firms - most recently Indofood Sukses Makmur
\nwith a $280 million issue in June - have raised funds
\nsuccessfully in the overseas bond market this year.<\/p>\n
Foreign investors shunned Indonesian corporate debt for a
\nnumber of years after the 1997-98 Asian financial crisis, but the
\nrecent turmoil in the U.S. has sent fund managers looking for
\nhigher-yielding emerging market issues.<\/p>\n
Indonesia's return to political stability under President
\nMegawati Soekarnoputri's one-year-old government, and a 16
\npercent appreciation in the rupiah currency against the dollar
\nover this period, has lured back many investors.<\/p>\n
But only debt issued by state-owned companies, which carries
\nan implicit guarantee from the government, and a handful of blue-
\nchip companies can attract foreign money.<\/p>\n
Berlian Tanker's Wong hopes the company can persuade investors
\nthat the company's financial position makes it worth a look.<\/p>\n
Berlian booked total assets of Rp 3.29 trillion (US$373
\nmillion) as of the end of last year, up from Rp 2.94 trillion a
\nyear earlier. Revenues rose to Rp 875.89 billion from Rp 635.30
\nbillion, with net profit jumping to Rp 112.83 billion from Rp
\n25.45 billion.<\/p>\n
The company's debt-to-asset ratio was 0.67 at the end of 2001,
\nand debt-to-equity ratio was 2.04, reflecting a strong capability
\nto repay debt. By comparison, Indofood, the latest successful
\nIndonesian debt issuer, had a debt-to-equity ratio of 2.30 as of
\nMarch 31.<\/p>\n
Pricing or the size of any issue is still a way off for
\nBerlian Tanker. Despite improving sentiment toward Indonesia,
\ninvestors still remain wary of possible future political
\ninstability, and the country's poor legal system.<\/p>\n
Berlian Tanker will have to issue at a high premium to attract
\ninterest, analysts say. Indofood's five-year bonds carried a
\ncoupon rate of 630 basis points over comparable U.S. Treasurys.<\/p>\n
The company plans to use the proceeds to enlarge the company's
\nfleet from 40 ships currently. Some of the ships will carry
\nchemical cargos from the Middle East, a business Berlian Tanker
\nexpects to increase in coming years.<\/p>\n
Large chemical plants in the Middle East are expected to start
\noperations by 2005, with an extra total annual output of 10
\nmillion tons, Wong said. This is expected to create more business
\nfor shipping companies.<\/p>\n
The company plans to spend $115 million to build eight
\nchemical tankers to meet this expected rise in demand, he added.<\/p>\n
Berlian Tanker is also vying for more shipping contracts from
\nits major oil shipment client, Indonesian state oil-and-gas
\ncompany Pertamina. It's currently on a short list for a contract
\nto supply 12 ships to Pertamina over the next two years.
\nPertamina is expected to award the contracts in September, Wong
\nsaid.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/i-made-sentana-1447899208",
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