Lautan Luas to issue bonds to pay off debts

JAKARTA (JP): Publicly listed PT Lautan Luas plans to issue Rp 200 billion (about US$23.8 million) in bonds in the domestic debt market by the end of June.

"Fifty percent of the proceeds from the bond issue will be used to repay the company's debts, 25 percent of it for business expansion and the remaining for additional cash balance to support daily operations," company president Indrawan Masrin said on Friday.

The rupiah bonds, which will mature in 2005, have fixed coupon rates of between 16 percent and 17 percent per annum and/or a floating rate of between 2.5 percent and 3.5 percent over the average rates on time deposits at five major banks.

The bonds will pay interest every six months.

"The portion balance between the fixed and floating rate bonds will depend on the market demand. We are being flexible," Indrawan said.

Lautan Luas' bonds received an "A" rating with a stable outlook from state rating agency PT Pefindo.

PT Jardine Fleming Nusantara and PT Trimegah Securities are the lead underwriters, with state Bank Mandiri acting as the trustee.

The bonds, issued in denominations of Rp 100 million, will be offered to the public between June 19 and June 21 and listed on the Surabaya Stock Exchange on July 7, Indrawan said.

He said the company's total outstanding debt was $24 million.

After the bond issuance, the debts will be repaid, he said.

Lautan Luas posted Rp 55.7 billion in net profit in 1999 on a total revenue of Rp 637 billion, compared to Rp 85.39 and Rp 600.4 respectively during the previous year.

The company's assets as of December 1999 grew to Rp 596 billion from Rp 572 billion the previous year.

The company's total debts were 40 percent of its total assets.

Lautan Luas distributes and manufactures specialty chemicals for the local as well as export markets. (udi)