Bakrie raises $67m through bonds

JAKARTA (JP): PT Bakrie Investindo, a Bakrie Group company, secured US$67 million yesterday through the issuance of exchangeable bonds to a consortium of eight domestic and foreign investment institutions.

Aburizal Bakrie, the company's chief commissioner, said the exchangeable bonds will mature in five years with an annual interest rate of four percent.

"After five years, the holders of the bonds can either exchange them for Bakrie & Brothers' shares, or collect their money from Bakrie Investindo," Aburizal said after witnessing the signing of an agreement on the bond issuance by the president of Bakrie Investindo, Anton Setianto.

Bakrie Investindo, 100 percent owned by the Bakrie family, is one of the shareholders in the publicly-listed Bakrie & Brothers. Investindo's lines of business include property, mining, broadcasting and husbandry.

Aburizal said that the funds from the bond issuance would be used mainly to repay Investindo's short-term commercial loans.

He said the company's total loans stood at some Rp 200 billion (US$90 million), with a debt to equity ratio of one to one.

"We're compelled to look for the funds abroad as we cannot find such a large amount of funds here. Our group's borrowings from domestic banks have reached the legal lending limit set by the central bank," Aburizal said.

On hand at yesterday's ceremony were Tanri Abeng, president of Bakrie & Brothers, and representatives of the eight investment institutions.

The eight institutions are HSBC Private Equity Fund L.P., Search Group, Peregrine Indonesia Fund Ltd., Prudential Asset Management Asia Ltd., Soros Capital Indonesia, Wardley Asia Pacific Investment Ltd., William E. Simon & Sons LDC and Simon Asia Entrepreneurial Capital Management LDC, which was acting as the lead arranger for the bond issue. (rid)