Indofood may sell Rp 1.75t of bonds

Indofood may sell Rp 1.75t of bonds

PT Indofood Sukses Makmur, the world's biggest maker of
instant noodles, may sell as much as Rp 1.75 trillion (US$192.6
million) of bonds to buy back dollar-denominated Eurobonds before
they come due in 2007.

"We plan to refinance the debt with a combination of bonds,
bank borrowings and internal cash," Djoko Wibowo, Indofood
director and corporate secretary said in an interview in Jakarta.
Indofood is seeking to raise the funds by the end of November, he
said.

Jakarta-based Indofood and other Indonesian companies are
selling bonds to expand and to repay debt. PT H.M. Sampoerna,
Indonesia's second-biggest publicly traded cigarette maker, plans
to sell Rp 1 trillion of securities this month to help repay debt
maturing in 2005.

Indofood plans to buy back the Eurobonds sold in June 2002 by
Indofood International Finance Ltd, its Mauritius-based unit, to
avoid higher taxes starting January 2005, Wibowo said. The
nominal value, or the amount of money the holder of the bond
receives when the security matures, of the bonds is $310 million,
he said. The company raised $280 million selling the same bonds
in June 2002.

"If we do not make any redemption, than we have to pay more in
rupiah due to the change in tax regulation," he said.

The Indonesian government plans to cancel a tax treaty with
the Mauritius government and raise taxes on Mauritius-issued
bonds to 20 percent starting in January. Under the existing tax
treaty, Indonesia levies a 10 percent withholding tax on holders
of bonds issued in the Indian Ocean offshore haven.

The company sold Rp 1 trillion of bonds in June with a coupon
of 12.5 percent. Indofood's foreign currency debt is rated B2 by
Moody's Investors Service and B by Standard & Poor's. Both are
junk designations, or high-risk, high-yield. -- Bloomberg