Antam to sell $150m in dollar bonds

Antam to sell $150m in dollar bonds

State-owned gold and nickel miner, PT Aneka Tambang (Antam), plans to sell dollar-denominated bonds to help fund a ferronickel project on Sulawesi island.

The company will use proceeds from the bond sale and a loan from PT Bank Mandiri, the country's biggest bank, for the expansion, said Antam president director Aditya Sumanagara in an e-mailed statement.

"We believe using the most favorable combination of a bank loan and corporate bonds will provide us with the low cost of debt and strong cash flows we need," he said.

Antam, which isn't rated by Moody's Investors Service or Standard & Poor's, joins Indonesian companies seeking to capitalize on investor appetite for higher-yielding corporate debt amid a decline in global interest rates.

Antam has met with 11 investment banks on the sale, it said, without elaborating. The company may sell as much as $150 million of bonds. Bank Mandiri in April agreed to lend Antam as much as $150 million for the ferronickel project, which will cost about $230 million.

Southeast Asia's second-biggest publicly traded miner produced 8,804 tons of contained nickel in 2002. Antam is expected to boost production capacity to 26,000 tons a year from 11,000 tons when its new smelter is completed. -- Bloomberg

APP, creditors agree on payment period

JAKARTA: Asia Pulp & Paper Co. (APP) and its creditors have reached preliminary agreement on extending the payment period for one third of the US$6.4 billion debt being negotiated this week, the Singapore-based company with Indonesian and China operations said.

APP can have up to 15 years to repay one portion of the debt, amounting to $2.2 billion and classified as unsustainable. That is longer than the previously agreed period of up to 10 years, specified in a Sept. 2002 preliminary agreement.

The company and its lenders have been hammering out details on how to restructure half of the $13 billion debt owed by APP's biggest defaulter after 27 months of non-payment. A successful agreement would bolster the government's efforts to lift confidence in a country whose companies owe more than $60 billion to overseas creditors.

Creditors, which include export credit agencies of Canada, France, Germany, the U.S. and Japan and Japanese trading companies, are to meet by June 9 to vote on the latest proposals. -- Bloomberg

Sampoerna proposes Rp 625b buyback

PT HM Sampoerna, Indonesia's second-largest cigarette maker, plans to buy back its own shares on the market with a value of up to Rp 625 billion (US$75.5 million), the company's third buyback since 2001.

Sampoerna will hold a shareholders' meeting on June 27 to get approval for the plan.

"The funds for the share buyback are from excess cash derived from the company's net profit," the company said.

The amount set aside would buy back about 3.7 percent of the company's total outstanding shares at current stock prices.

Sampoerna bought back 2 percent of its shares last year and 3 percent the previous year. The latest buyback will be done within 18 months after the plan is approved, the company said.

Shares of Sampoerna have gained 3.4 percent this year, lagging behind the benchmark Jakarta Stock Index, which has risen 17 percent.

In December, Sampoerna had its foreign currency credit rating raised to B from B- by Standard & Poor's Corp. The rating upgrade affects $65.9 million in notes. -- Bloomberg

Aussie rejects Emirates request

SYDNEY: The Australian government has rejected a request from Emirates Airlines to fly twice a day from Sydney to Dubai, bowing to pressure from flag carrier Qantas, the Australian Financial Review reported on Thursday.

Qantas Airways Ltd. has told the government it opposed the Gulf airline's request for increased access to Australia because it did not play by the same "economic rules" as local airlines. Industry analysts have said Qantas' opposition stems from its desire to protect the lucrative "kangaroo route" between London and Australia, and the rest of Europe.

"We are pleased the government has adopted a measured and phased approach in the current difficult environment for the airline industry," a Qantas spokesman told the newspaper.

Qantas has issued several earnings downgrades in recent months, most recently slashing its full-year profit forecast by 30 percent following the war on Iraq and the outbreak of Severe Acute Respiratory Syndrome (SARS).

Federal transport minister John Anderson said he would reconsider Emirates' request on Sydney in a years' time but did approve a request to operate twice daily services to Dubai from Melbourne, Perth and Brisbane from October. -AFP

Peugeot sees tough year ahead

PARIS: The head of French automaker PSA Peugeot Citroen warned on Wednesday the group would have a hard time meeting its targets this year as it grapples with a soaring euro and an anemic global economy.

"Economic and monetary circumstances are unfavorable and in these conditions it will be difficult to reach our objectives this year," Peugeot President Jean-Martin Folz told a shareholders' meeting.

He cited in particular the "worrying evolution of currencies" against the euro, which this week hit a record high of more than US$1.19 and shows few signs of losing steam against the greenback.

In Europe there are no "prospects for an improved market at the moment," Folz said, adding that "the economic situation has seriously deteriorated since February."

Peugeot hopes to sell 3.35 million vehicles worldwide this year and four million in 2006, goals that Folz described as "ambitious but reasonable." -AFP