ASF to issue Rp 1t in bonds
The Jakarta Post, Jakarta
Financing company PT Astra Sedaya Finance (ASF) plans to issue a Rp 1 trillion (US$107.18 million) worth of bonds in October to help increase automobile sales.
The company, which is the financing unit of the country's largest automotive producer PT Astra Internasional, plans to use the proceeds from the bonds issuance to provide more loans for consumers wishing to buy cars and motorcycles.
ASF president director Gunawan Geniusahardja told reporters on Friday that his company expected higher amount of loans, reaching up to Rp 7 trillion by the end of the year.
The loans, said Gunawan, would also be financed by internal funds and bank borrowing.
The new bonds will have a variety of tenures, ranging from one year to four years. The company has appointed Andalan Artha Advisindo Securities and PT Trimegah Securities as the underwriters.
The planned sale, which will be registered at the Surabaya Stock Exchange, is the second for ASF in recent years after the previous sale of Rp 500 billion in bonds.
Automotive sales have been escalating this year, spurred on by the availability of low-interest loans. Car sales for 2004 are expected to reach a record high of more than 420,000 units, while the figure is expected to be 3.6 million for motorcycles.
Encouraged by the strong demand, the financial arms of automotive companies are aggressively looking for more funds, so they can lend more.
On Monday, financing company PT Indomobil Finance Indonesia announced its plan to issue Rp 300 billion worth of bonds in October, which will be followed with another bond issuance of Rp 750 billion. The firm revised upward its target of financing for 2004 by 100 percent from last year to Rp 1.4 trillion.
Another financial arm of Astra, Federal International Finance (FIF), announced last month its plan to issue Rp 500 billion bonds.
Despite the various bond offers, Gunawan is confident that the market would welcome ASF's planned bonds.
"I'm optimistic that our bonds will be welcomed because we target a different market segment. The FIF, for example, focuses on Honda motorcycle buyers, while we eye the market outside of Honda," said Gunawan.