Indomobil Finance to issue Rp 300 billion in bonds

Indomobil Finance to issue Rp 300 billion in bonds

The Jakarta Post, Jakarta

Financing firm PT Indomobil Finance Indonesia (IFI) plans to sell
Rp 300 billion (US$32.3 million) worth of bonds in October to
help boost automobile sales.

The firm, which is the financing arm of Indonesia's second
largest automobile distributor PT Indomobil Sukses Internasional,
plans to use proceeds from the bonds to help finance the
expansion of its business.

IFI president director Wiwie Kurnia told the press on Tuesday
that the company, which provides financing for the purchase of
cars and motorcycles, expected loans to reach Rp 1.4 trillion
this year, a 100 percent jump from last year's volume.

Wiwie said that until August, the company had provided up to
Rp 700 billion worth of loans, of which 60 percent went to
motorcycle buyers and the remainder to car buyers.

The target, he added, would be equivalent to the sales of over
90,000 cars and 700,000 motorcycles.

The bond issue will have three options. The first one is worth
Rp 50 billion and has a 370-day tenure, the second one is worth
Rp 75 billion with a two-year tenure and the third totals Rp 175
billion with a three-year tenure.

Wiwie also said that the sale of the bonds, which were given
an A rating by a local rating agency PT Pefindo, would be managed
by PT Kresna Graha Sekurindo.

"We expect to collect Rp 310 billion in revenues and Rp 54
billion of net profit (this year)," said Wiwie, adding that the
company had been collaborating with several banks in the
provision of its loans, such as Bank Danamon, Bank Mega, BII and
BCA.

For 2005, Wiwie said the company's financing volume would
hopefully reach around Rp 2 trillion, which would also be
supported by another sale of bonds worth Rp 750 billion.

Previously in 2000, another Indomobil financing arm, PT
Swadharma Indotama Finance, issued Rp 150 billion in six-year
bonds with a coupon rate of 18.25 percent.

Indomobil finances the sale of vehicles from a variety of
leading brands, such as Suzuki, Nissan, Mazda, Renault, Audi,
Volvo and Volkswagen.

Car sales have been on the rise this year amid strong
household consumption bolstered by the availability of cheap
loans due to lower interest rates. Car sales for this year are
expected to reach a record of more than 420,000 units.