IFC lends $5m to local firms
IFC lends $5m to local firms
JAKARTA (JP): Local mining service firm PT Dianlia Setyamukti
said the World Bank's private-sector arm, International Finance
Corporation (IFC), had agreed to provide it with a US$5 million
loan to boost its production.
Company president Tjahyono Imawan said on Wednesday the
agreement was signed last week and the loan would be disbursed
later this month.
"The loan is not much, but it indicates foreign investors'
confidence in our company," Tjahyono told a media briefing.
He said the loan was aimed to cover the company's expansion
program worth $10 million to boost production to 2.15 million
tons this year from 1.8 million tons in 2000. The remaining $5
million would be covered with the company's equity and loans from
local financial institutions.
The company, which provides excavation and transportation
services to mainly coal mining companies, would use the loan to
buy heavy equipment, including excavators, shovels and
transportation and add to its working capital, Tjahyono said.
Of the total loan, $4 million carries an interest rate of 5
percent above the London inter-bank offered rate (LIBOR) maturing
in 2006, while the remaining $1 million is due in 2010 with an
interest rate of 4.5 percent above LIBOR, Tjahyono said.
The company would pay the loan's installment every six months
starting next year, he said, adding IFC had an option to convert
the loan into shares starting 2004.
Company finance director Bimantoro Adisanyoto said the loan
would enable the company to meet the growing demand in the mining
industry.
Early this year, the company was awarded by its coal mining
company clients contract extensions for another three to five
years, but Bimantoro was reluctant to provide figures on the
value of the contracts.
The company, which was established in 1991, provides full
mining services to coal mining company PT Berau Coal located in
East Kalimantan.
It provides transportation to carry coal produced by coal
mining company PT Adaro Indonesia in South Kalimantan, where it
serves as the subcontractor of Adaro's contractor PT Pamapersada
Nusantara.
Aside from coal companies, the company also provides services
to gold mining companies, but, the company said, gold accounts
for only 10 percent of the company's operations.
Akil Abduljalil, IFC's senior executive, said IFC agreed to
provide a loan to Dianlia on the grounds that the company
supported the superior mining industry.
"We strongly support private sectors or firms that are export-
oriented," he told The Jakarta Post.
The loan also indicated IFC's commitment to help
the country recover from its economic crisis, which started in
mid-1997, he added.(05)