Antam gets fresh loans from BCA for expansion
Antam gets fresh loans from BCA for expansion
Rendi Witular, The Jakarta Post, Jakarta
State-owned mining company PT Aneka Tambang (Antam) announced
on Wednesday that it had received US$60 million in loans from
Bank Central Asia (BCA), the country's third largest bank, to
fund the company's ferronickel expansion project.
Antam said in a press statement that the loans carried an
interest rate of between 7 percent and 7.5 percent, with a
maturity period of seven years and a 28-months grace period.
The company recently issued a seven-year note worth $200
million, also to raise funds for the ferronickel project. The
notes carry a 7.37 percent coupon rate, with a yield to maturity
of 7.87 percent.
Antam, which is listed in Jakarta and Sydney, is currently in
the process of expanding its ferronickel factory under a project
known as FeNi III.
With the expansion Antam expects to double its production of
ferronickel to 26,000 tons per year from the current 11,000 tons.
The project is also aimed at maintaining the company's
competitive advantage as the world's lowest-cost nickel producer.
The project, which is scheduled for completion in 2006, is
projected to cost Antam between $320 million and $330
million.
Besides nickel, Antam also mines gold, bauxite, iron sand and
silver. Its exploration area covers a total of 2.7 million
hectares.
The government owns a 65 percent stake in the company, while
the remaining 35 percent shares are owned by the investing
public.
Meanwhile, BCA said in a press statement that its loan
agreement with Antam reflected the growing confidence of banks in
the corporate sector.
"The loan facility to Antam has shown that BCA is getting more
active in pursuing its role as a financial intermediary," BCA
said.
Banks have for long been reluctant to channel loans to the
country's corporate sector as they consider the business
environment as not yet being conducive for companies to develop
their businesses and repay their loans.
The corrupt judicial system and the weakness of the existing
bankruptcy law in protecting creditors are also factors
preventing the banks from channeling loans.