Bank syndicate loans Rp 400b to Indosiar
Bank syndicate loans Rp 400b to Indosiar
JAKARTA (JP): A syndicate of local banks led by publicly listed Bank Danamon agreed on Friday to provide a loan worth Rp 400 billion (US$35.7 million) to publicly listed television company PT Indosiar Visual Mandiri.
Bank Danamon president Arwin Rasyid said that under the agreement, Indosiar will use the funds to refinance its existing loan to PT Holdiko Perkasa, a holding company managing the Salim Group's assets, currently under the control of the Indonesian Bank Restructuring Agency (IBRA).
"We are optimistic that Indosiar will be able to repay the syndicated loan due to the company's good financial performance," he said.
He added that the country's growing advertising expenditure will also enable the TV station to achieve better results this year as well as in coming years.
According to the Indonesian Advertising Agency Association, total advertising expenditure will increase to Rp 9.1 trillion this year from Rp 6.9 trillion in 2000.
It also said that about 62 percent of this year's total spending on advertising would go to TV stations.
Arwin said Indosiar had also pledged assets worth about 125 percent of the loan or about Rp 500 billion as collateral.
He said that Bank Prima Express is the only member of the syndication at present but he hoped other banks would follow suit.
Arwin said Bank Danamon will allocate Rp 350 billion for the loan, while Bank Prima Express will provide the remaining Rp 50 billion.
"We will disburse the loan on June 26," he told reporters, after signing the agreement."The loan will mature in June 2005."
Arwin said Bank Danamon will reduce its share in the syndicated loan to about Rp 100 billion by selling some of the credit to other local and overseas banks.
Among the potential buyers are Bank Niaga, Lippo Bank, Bank Universal, HSBC and ABN Amro Bank, he said.
"We hope to complete the plan in September," he added.
The loan, with a maturity of four years, will be floated about four percentage points above the average deposit rates, he said.
Dana Sutantio, the director of IBRA's asset management and investment, said that the syndicated loan will enable Indosiar to repay its debts to Holdiko with a 100 percent recovery rate.
"It is the first time during the restructuring program...we hope it will trigger other debtors to do the same thing," he said.
Indosiar's debt repayment will help IBRA fulfill its duty to provide Rp 27.9 trillion in cash to the government this year, he said.
According to him, Indosiar will repay all its debts to Holdiko within the next two weeks.
Indosiar is one of over 100 companies transferred by the Salim Group to Holdiko as part of the business group's debt settlement to the government. To date, Holdiko controls about 57 percent of Indosiar's shares.(05)