Lautan Luas to issue Rp 300b worth of bonds

Evi Mariani, The Jakarta Post, Jakarta

PT Lautan Luas, a publicly listed chemical manufacturing and distribution company, will issue seven-year bonds worth Rp 300 billion (US$33 million) with fixed and floating interest rates.

At a press conference on Monday, the company said the bonds would be divided into two series: A-series bonds offering fixed interest rates ranging from 13.75 percent to 14.50 percent per annum, and B-series bonds offering fixed and floating interest rates calculated on the average interest on six-month time deposits, plus 2.75 percent to 3.25 percent per annum.

The interest on the bonds, which are to be offered from June 3 to June 5, will be paid every six months.

Vice president Pranata Hajadi said that 46 percent of the funds generated from the bond offering would be used to finance new business investments and to strengthen the distribution and logistics network, 34 percent to strengthen working capital and 20 percent to repay bank debts.

The 52-year-old company plans to establish eight new plants to produce basic chemicals for various industries, including the food, cosmetics and textile industries.

The underwriters for the bonds are Trimegah Securities and Danareksa Sekuritas, and the trustee is Bank Mandiri.

Lautan Luas does not provide any guarantees nor sinking funds for the bond payments. However, Pranata claimed that in the last six years of the financial crisis in the country, the company has never defaulted on its debts.

The company has a rating of A minus by credit rating company PT Pefindo.