Jasa Marga to issue Rp 10t bonds: CEO

Urip Hudiono, The Jakarta Post, Jakarta

State-owned toll road builder and operator PT Jasa Marga plans to offer Rp 10 trillion (US$1.17 billion) in bonds to fulfill the year's need for working capital of the same amount, said company president Syarifuddin Alambai.

The bond plan, he explained on Monday, was among three feasible capital-raising options being considered by the company, apart from an initial public offering (IPO) and offering projects to investors with the government as its standby buyer.

The bond offering, however, is seen to be the most viable option in the short term.

"It can be done within the first semester," Syarifuddin said after a meeting with Ministry of Finance officials.

The proceeds, he continued, would be used to fund Jasa Marga's construction of new toll roads this year in Jakarta, Semarang, Surabaya and Solo.

The roads are part of projects being developed until 2009 for a total capital of Rp 86 trillion, whereas the company has only Rp 42 trillion at present.

Jasa Marga offered 10-year bonds worth Rp 900 billion in September and Rp 1 trillion in October.

As to the company's IPO plan, Syarifuddin said it would be realized later this year.

"The IPO, offering up to 40 percent of our total shares, will hopefully be done in October or November," he said.

Syarifuddin previously said the IPO would target Rp 1.5 trillion in proceeds, which would be used to repay Jasa Marga's debts and to finance the construction of a 1,486-kilometer toll road from Merak, Banten, to Banyuwangi, East Java.

Jasa Marga currently manages 383 kilometers of the country's 520 kilometers of toll roads. The remainder is managed by private investors.

This year, the company's revenue target is Rp 1.7 trillion, mostly from toll its road traffic revenue of Rp 4.7 billion per day. Last year, the company recorded Rp 1.3 trillion in revenue and a net profit of Rp 250 billion.

A number of investors have previously called on the government to raise the toll road tariff to make investment in the sector more appealing.