PGN may issue $250m in bonds next month<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
State gas distribution company Perusahaan Gas Negara (PGN)
\nwill issue dollar-denominated bonds worth about US$250 million in
\nAugust or September, a company official said on Tuesday.<\/p>\n
PGN finance director Djoko Pramono said that the proceeds
\nwould be used to help finance a 190-kilometer gas pipeline
\nproject in South Sumatra.<\/p>\n
He added that the company would issue another $250 million-
\nworth of bonds in the first quarter of next year to fund the
\ndevelopment of a gas pipeline from the Duri gas field in Riau to
\nNorth Sumatra's Belawan Port.<\/p>\n
He said that the company would decide next week on the lead
\nunderwriter for the bond issue. So far, five underwriting firms
\nhad been invited to join the selection process.<\/p>\n
He did not name the firms, but earlier reports said that a
\nnumber of firms including ABN-Amro, Credit Suisse First Boston
\nand Merrill Lynch had expressed interest in leading the company's
\nbond issue and initial public offering (IPO).<\/p>\n
ABN-Amro played a major role in the successful IPO of state
\nBank Mandiri.<\/p>\n
The government also plans an IPO for PGN later this year as
\npart of a privatization program. Local investment bank PT
\nDanareksa Sekuritas is reportedly also interested in underwriting
\nit.<\/p>\n
PGN is currently awaiting ratings on the planned bonds from
\nStandard & Poor's and Moody's Investors Service.<\/p>\n
A source familiar with the deal told Dow Jones Newswires that
\nS&P had informally told PGN it would assign a B rating to the
\nbonds. Similarly, Moody's also unofficially told the company it
\nwould rate the bonds B1. Both are junk grades.<\/p>\n
A number of Indonesian companies have been successful in
\nraising funds overseas through bond issuance, taking advantage of
\nforeign investors seeking higher returns amid declining global
\ninterest rates and the fall in value of the U.S. dollar against
\nmajor currencies.<\/p>\n
Elsewhere, Djoko said that PGN booked a jump in 2002 net
\nprofit to Rp 1.1 trillion, from Rp 317 billion the previous year,
\nbut did not explain why this occurred.<\/p>",
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"sponsor": "Okusi Associates",
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