Pawnbroker sells bonds to strengthen capital structure

JAKARTA (JP): Following the success of its first bond issuance in 1993, Perum Pegadaian, the state-owned pawnbroker, will again float five-year bonds worth Rp 25 billion (US$11.6 million) in June, in an effort to strengthen its capital structure.

The company's president, Sjamsir Kadir, told a press conference here yesterday that the bonds will be offered between June 15 and 17 and be traded on the parallel market on July 7.

In 1993, the company issued five-year bonds worth Rp 50 billion to support its expansion.

A.G. Rompas, the president of PT Inter-Pacific Securities, the underwriter of the bond issuance, said that the interest rate of the bonds will be floated at one percent above the average level of interest rates on six-month deposits offered by state banks.

He said that the funds to be raised from the bond issuance will be distributed by Perum Pegadaian to its 562 branch offices in all of the country's 27 provinces.

According to Sjamsir, Perum Pegadaian's after-tax profit increased from Rp 2.9 billion in 1991 to Rp 4 billion in 1992 and Rp 11 billion in 1993.

The company's outstanding loans inched upward from Rp 165.74 billion in 1992 to Rp 190.38 billion in 1993.

The company's assets also rose slightly from Rp 335 billion in 1992 to Rp 362 billion in 1993.

The number of the company's borrowers increased from 3.2 million in 1992 to 3.3 million in 1993. More than 50 percent of the company's clients are farmers. (03)