Media giant offers bonds to finance power plant
The Jakarta Post, Jakarta
Media giant PT Jawa Pos plans to issue five-year bonds valued at Rp 200 billion (US$24 million) later this year to raise funds for its coal-fired power plant project in Gresik, East Java, which will supply electricity to its subsidiaries.
In a public expose and due diligence on Thursday, the president of Jawa Pos, Dahlan Ikhsan, said 78.9 percent of the bond proceeds would be used to finance the 25-megawatt power project, which is slated to be completed in 2004.
Jawa Pos expects to significantly save on overhead costs once the power plant starts supplying the company's subsidiaries, especially to its paper producer unit PT Adiprima Suraprinta, Dahlan said.
He also said 13.2 percent of the bond proceeds would be used to refinance the company's maturing debt, and the remaining 13.2 percent would be working capital for Adiprima to boost its production output to 450 tons per day from 150 tons a day.
The bonds carry a fixed coupon rate of 13 percent to 14 percent, which will mature in five years, but is callable in the first year.
The company has appointed PT Makinta Securities and PT Panin Sekuritas as the underwriters for the bond issue.
The bonds have received an A- rating with a stable outlook from local rating agency PT Pefindo.
The book-building of the bonds is slated for Oct. 16 to Oct. 27, the offering period for Nov. 12 to Nov. 14, and the bonds are to be listed on Nov. 20 on the Surabaya Stock Exchange.
Jawa Pos is the publisher of the country's second largest newspaper in terms of circulation, Jawa Pos, and 85 other printed media grouped in the Jawa Pos News Network. The company also publishes Guo Ji Ri Bao, the country's largest circulation Chinese-language newspaper.
Besides print media, Jawa Pos is also engaged in television. It now owns three TV stations: JTV in Surabaya, Riau TV in Pekanbaru and Batam TV in Batam.
In the first semester of this year, Jawa Pos recorded a net profit of Rp 35 billion. Last year it booked a profit of Rp 60.7 billion, up from Rp 32 billion in 2001.
The company has projected more than 30 percent increase in net profit this year.