BEI to issue Rp 500b of bonds

BEI to issue Rp 500b of bonds

Leony Aurora, The Jakarta Post, Jakarta

State-owned Bank Ekspor Indonesia (BEI) will issue Rp 500 billion
(US$ 54.74 million) of bonds in the second quarter of this year,
says a top executive.

The proceeds of the rupiah-denominated bond sales would be
used to cover some Rp 300 billion worth of mid-term notes, which
are set to mature in July, the bank's managing director E
Firmansyah told reporters on the sidelines of a meeting of the
executives of state-owned enterprises (SOEs) here on Tuesday.

"The rest will be used for our working capital," he said.

Greater working capital would bode well for the company's plan
to increase lending to 8 percent this year. In 2004, it lent out
nearly Rp 6 trillion, mostly for resource-based exports.

In the first nine months of 2004, BEI reported an unaudited
net profit of Rp 127 billion. Its assets stand at about Rp 7.4
trillion.

Firmansyah also said the bank was moving forward with its
plans to convert itself into an export credit agency (ECA), which
the country does not have at present.

"We plan (to complete the change) in three years," he said.

The conversion to ECA is in line with the bank's vision set
when it was established.

"At that time, we did not have the law to support it," said
Firmansyah.

The plan had been presented to the central bank and basically
approved, he said. "They (the central bank's executives) said
that we needed an ECA to increase exports and foreign reserves."

To develop the agency, BEI has to wait for the Ministry of
Finance to draft a law as its umbrella and then the House of
Representatives must pass it.

"There was a draft previously, but it may still require
several adjustments," said Firmansyah.

By being an ECA, it expects to be able to focus more on
providing export credit facilities, thus easing competition from
other banks.

It aims to expand export credit between 10 percent and 15
percent per year.