CMNP to issue Rp 1t bonds

Dadan Wijaksana, The Jakarta Post, Jakarta

Toll road operator and builder PT Citra Marga Nusaphala Persada (CMNP) plans to issue Rp 1 trillion (US$108 million) worth of rupiah-dominated bonds in the first semester of next year to support the company's business expansion plans.

CMNP president Daddy Haryadi told reporters on Wednesday at a seminar on infrastructure that the company would need fresh funds next year if it wanted to participate in the government's planned massive infrastructure projects.

"We do not want to miss out on those projects, but we need to have fresh money for that. And a bond issue is certainly an option, perhaps about Rp 1 trillion," Daddy said.

The government has made pledges to develop infrastructure facilities over the next five years in various business sectors such as energy, transportation, telecommunications and so on -- all necessary to support and generate higher economic growth.

And since the financing needs would be enormous, private participation would be required, something that both domestic and overseas investors should take advantage of.

State Minister for National Development Planning Sri Mulyani Indrawati said on Wednesday that the country would need about Rp 1,030 trillion in financing for the 2005-2009 period to fund the various infrastructure projects, of which around Rp 600 trillion would come from the private sector as the government is already facing many constraints.

Daddy said that the government's plans should suit well with the company's business expansion plans, saying the firm could even look for other ways to generate fresh funds, in addition to the bond issue.

"Funding sources for expansion could also come from our own equity or perhaps even loans, as we know the financing for infrastructure projects is huge," he said.

Based on rough calculations, Daddy added, it would cost about Rp 50 billion to construct one kilometer of a toll road, meaning that Rp 1 trillion could only finance the construction of 20 km.

Elsewhere, Daddy also said that before the company could move ahead with its bond issue plan, it intended to clean up the firm's debts -- in the form of dollar-dominated bonds -- by the end of the year.

"I think we have now about $13 million worth of dollar debts to settle. We would buy back those bonds from the creditors, hopefully it could be completed by year-end, so it would not hold the company up from its expansion," he said.

Formerly controlled by the eldest daughter of the country's former president Suharto, Siti Hardiyanti Rukmana, CMNP is now 58.3 percent owned by the public.

State toll road operator PT Jasa Marga also owns a 17.8 percent stake in the company.