Aneka Tambang may issue bonds

Aneka Tambang may issue bonds

Dow Jones, Jakarta

Indonesian state-owned miner PT Aneka Tambang, or Antam, is still considering issuing U.S. dollar bonds despite securing a $318.5 million loan to help finance plans to expand its ferronickel mining operations.

Management are concerned the loan from German credit export agency Hermes Kredit Versicherungs AG may prove costly, a company source said on condition of anonymity. The loan is in dollars while the company's costs for its expansion plans are in euros, at a time when the U.S. dollar is in a downward trend globally.

"So, there is still an option to look for alternative financing for the project," the source said.

Antam had said it was considering issuing $150 million in dollar bonds, and internal cashflow, to fund the expansion if it didn't use the loan from Hermes.

A slew of Indonesian companies have issued bonds in recent months on demand for high-yield investments from foreign investors. Most recently, Indofood Sukses Makmur, a food production company, was able to raise $280 million from the international bond market.

Indonesia's political stability under President Megawati Soekarnoputri has led foreign investors to invest in blue chip or state-owned Indonesian company paper for the first time since the 1997 Asian crisis.

Antam has planned a third ferronickel project for the last four years, which would double its output to around 25,000 metric tons a year, but has been unable to raise the necessary finances.

Antam is 65 percent-owned by the Indonesian government, and is listed on both the Jakarta and Australian Stock Exchanges.