Pakuwon Jati to issue bonds
Pakuwon Jati to issue bonds
JAKARTA (JP): PT Pakuwon Jati, a Surabaya-based property
developer, said yesterday it will issue bonds worth Rp 200
billion (US$85.3 million) to finance the development of a new
shopping mall in Surabaya, East Java.
The bonds have a term of five years, with a fixed interest
rate.
"We prefer a fixed rate with an assumption that bondholders
can make profits not only in terms of interest payments, but also
capital gains, because the bonds can be traded on the Surabaya
Stock Exchange," a director of the lead underwriting company PT
Sigma Batara, Eko Ganefianto, told journalists yesterday.
Eko declined an assumption that investors would not get much
benefit if the coupon rate was fixed for the whole five years.
"We need a few days more to determine the fixed rate," he
added.
Meanwhile, a Pakuwon Jati director, Omar Ishananto, said that
the planed mall, to be called "Pakuwon Megamall", needs total
funds of Rp 289.8 billion. Therefore, the company will provide
the other Rp 89.8 billion from its own equity.
Omar said that Pakuwon Megamall will be built on a 23-hectare
plot on Jl. Major General Sungkono in West Surabaya. The mall
will have a total space of 215,000 square meters.
To guarantee the bonds, Pakuwon has two sources of funds: the
expected net revenue from the megamall's rental payments and its
insurance premium, he said.
"We expect to gain net rental payments of Rp 250 billion in
the first five years," Omar said.
He added that Pakuwon Jati has gained rental commitments for
60 percent of the total space in the planned megamall. PT
Matahari, a retailing firm, will be the largest tenant, with a
20-year contract.
Pakuwon Jati, set up in 1986, has built three shopping
centers: the eight-floor Tunjungan Plaza I (which commenced
operation in 1986), the 17-floor Tunjungan Plaza II (1991) and
Tunjungan Plaza III (earlier this year), all located in "Pakuwon
City" in Surabaya.
Omar confirmed yesterday that early next month, his company
will break the ground for the construction of its Tunjungan Plaza
IV, an integrated shopping center with a 212-room star-rated
hotel. (alo)