Bakrie Pipe gets $80 million loan

JAKARTA (JP): Steel pipe maker PT Bakrie Pipe Industries, a subsidiary of PT Bakrie and Brothers, has secured a US$80 million syndicated loan from local and foreign finance companies to refinance its foreign debts.

The company signed a five-year loan Saturday in Bali, with Bank Bira as the loan's lead arranger.

The syndication consists of Bank Bira, Bank Austria, American Express Bank, Arab Banking Corporation, Fuji Bank, Sakura Bank, Sanwa Bank, Sumitomo Bank, Royal Bank of Scotland, ING Barings and Bapindo.

The loan has a yearly interest rate of 1.60 percent above the Singapore Interbank Offered Rate (Sibor).

"The loan will be repaid in installments for five years, so the company will not be burdened with an inflated dollar rate when repaying the loan," the company said.

The company said the prices of its products were quoted in dollars and parent company PT Bakrie and Brothers had also hedged about 94 percent of its foreign loans.

The loans will be used to refinance existing loans made to increase the production capacity of its electric-resistant welded steel pipe to 300,000 tons a year from 80,000 tons.

The company claims to lead the market in the sales of the electric-resistant welded pipes and exports some 10 percent of its production to Asian countries.

PT Bakrie Pipe, which has a manufacturing plant in Bekasi, West Java, sells steel pipes to businesses in the oil and gas, telecommunications, drinking water, property and construction sectors. (das)