Pegadaian to issue Rp 150b bonds
Pegadaian to issue Rp 150b bonds
JAKARTA (JP): State-run pawnshop operator PT Perum Pegadaian
will issue Rp 150 billion (US$17.6 million) bonds with an eight-
year tenure in mid-July, the company's president Sjamsir Kadir
said on Tuesday.
Sjamsir said proceeds from the bond issuance would be used to
boost the company's operations in rural areas.
"The bonds carry a fixed interest rate of 15.625 percent per
annum for the first year, and a floating interest rate
thereafter, from the second year through bond maturity," Sjamsir
said.
The floating rate will be the average of the interest rate on
six-month time deposits of state banks plus a premium of 1.75
percent per annum, he added.
He said the bond offering would be held between July 13 and
July 17, while the listing on the Surabaya Stock Exchange would
be on August 8.
Pegadaian has thus far issued a total of Rp 474.6 billion
since 1993.
He said the company charged its clients a 1.25 percent
interest rate per 15 days, or about 30 percent per annum.
He attributed the high interest rate charge to the high
administrative cost as the loans extended to clients were a small
principal amount, but in bulk volume in total.
The number of Pegadaian's clients stood at 12.7 million
individuals in 1999, compared to 9.6 million the previous year.
"To those clients, we channeled cumulative funds of Rp 3.2
trillion in 1999. But this will increase to Rp 3.6 trillion this
year," he said.
Most of the funds channeled were to farmers and traders who
needed cash for their businesses. And the tenure of the funds
extended to them are usually short-term, between three months and
eight months, he said.
"Currently, farmers account for 35 percent of our total
clients, rural traders 20 percent, fishermen 8 percent, small
manufacturers 6 percent and the remaining percentage is made up
of various others," he said.
Pegadaian posted Rp 17.8 billion net profit in the first
quarter this year.
The state-run company booked a net income of Rp 61 billion for
1999, compared to Rp 53 billion the previous year.
Total funds channeled amounted to Rp 3.2 trillion and Rp 3.1
trillion in 1999 and 1998, respectively. (udi)