PLN begins prepping seventh bond issue<\/p>\n
Tony Hotland, The Jakarta Post, Jakarta<\/p>\n
State electricity company PT Perusahaan Listrik Negara (PLN)
\nbegan on Wednesday the book building process for its Rp 1.5
\ntrillion (US$164.83 million) bond issue to refinance the
\ncompany.<\/p>\n
The unsecured bonds will have a 10-year maturity period, with
\nindicative coupons of between 12 percent and 12.5 percent,
\ncompared to the 11.5 percent current yield offered by comparable
\ngovernment bonds in the secondary market.<\/p>\n
All proceeds from the bond issue -- the seventh for PLN --
\nwill be used to refinance the equity that had been spent to build
\nthe 850-megawatt Muara Tawar power plant in West Java.<\/p>\n
"The construction of the plant was completed in June," said
\nPLN deputy finance director Yusuf Hamdani.<\/p>\n
PLN president Eddie Widiono said the new plant would help the
\ncompany reduce production costs by converting more expensive fuel
\noil into cheaper gas.<\/p>\n
The company said it would require Rp 29 trillion this year to
\nbuy crude oil, coal and natural gas to run its power plants, of
\nwhich crude oil makes up the bulk at a cost of Rp 14 trillion.<\/p>\n
By using natural gas, the company could save from Rp 10
\ntrillion to Rp 14 trillion annually.<\/p>\n
The book building for the bond issue, rated Single A by PT
\nKasnic Credit Rating Indonesia, will take until Oct. 21. The
\noffering period is expected to run from Nov. 3 to Nov. 5, while
\nthe bonds will be listed on the Surabaya Stock Exchange on Nov.
\n11.<\/p>\n
PLN has appointed Trimegah Securities, Danareksa Securities
\nand Bahana Securities to arrange the issue.<\/p>\n
The issue is expected to be well received, as it is the first
\ntime PLN is tapping into the local bond market since the 1997
\nfinancial crisis.<\/p>\n
The company projected that the nationwide demand for
\nelectricity would increase by 6.6 percent to 175 terrawatthour
\n(TWh) in 2013 from 90.5 TWh last year. The national output
\ncapacity of power plants is also expected to expand to 54,528
\nmegawatts by 2013.<\/p>\n
Earlier, PLN had planned to put off the sale until next year
\nupon concerns over rising U.S. benchmark rates and security
\nconditions ahead of the Sept. 20 election runoff.<\/p>\n
However, it decided to continue with the sale this year, as
\nthe market is deemed to be more favorable than next year.<\/p>\n
PLN's first semester financial results show the company
\nbooking Rp 29.9 trillion in revenue and Rp 1.33 trillion in
\noperating profit. About 55 percent of the profit came from the
\nhousing and industry sectors.<\/p>\n
No year-on-year comparison was available.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/pln-begins-prepping-seventh-bond-issue-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }