PGN cut bonds size to $150m

PGN cut bonds size to $150m

JAKARTA: State-owned gas utility PT Perusahaan Gas Negara
(PGN), has decided to cut the size of its international bond
issue to US$150 million from $200 million due to weaker demand
for Indonesian debt following last month's deadly hotel bombing
in Jakarta, a banker familiar with the deal said Monday.

The banker told Dow Jones Newswires that PGN is expected to
relaunch the 10-year bond this week after the attack on the
Jakarta Marriott, which killed at least 15 people, forced the
company to delay the issue for over three weeks.

"The company decided to cut the size as it's still seeking to
price the bond at a yield around 7.75 percent," the banker said.

He, however, doesn't rule out the possibility that the amount
will be revised upward to $200 million if demand recovers.

PGN plans to use the bond to help fund its South Sumatra-West
Java gas pipeline project.

Moody's Investors Service has assigned a B3 senior unsecured
rating to the proposed issue, while Standard & Poor's Ratings
Services has assigned a B- foreign currency rating. Credit Suisse
First Boston is the lead manager of PGN's bond offering.--Dow
Jones

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Indosat operating profits up 34%

JAKARTA: PT Indonesian Satellite Corp. (Indosat) said over the
weekend that its unaudited net profit fell 23 percent in the
first half of the year to Rp 402.1 billion from Rp525.1 billion a
year earlier mainly due to a new accounting policy on
amortization of goodwill.

The company said that as of Jan. 1 this year, it changed the
amortization period of goodwill as a result of acquiring cellular
company PT Satelit Palapa Indonesia, or Satelindo, to 15 years
from five years. Indosat bought Satelindo last year.

The extension of goodwill over the longer period reflects the
company's view that the cellular business in Indonesia is
expected to grow over a longer period than five years, the
company said.

Indosat said that its operating revenues rose 27 percent to
Rp3.882 trillion from Rp3.067 trillion, driven by a 53 percent
increase in cellular revenues, which is largely attributed to a
rise in the number of subscribers.

The cellular business contributed 57.5 percent to the
company's revenues in the first half of the year, international
calls 25.4 percent, multi media 15.9 percent, and other services
the remaining 1.2 percent, the company said.

Operating income rose 34 percent to Rp1.244 trillion from
Rp925.9 trillion.

Singapore Technologies Telemedia owns a 42 percent stake in
Indosat, the Indonesian government 15 percent, and public
investors the remaining 43 percent.--Dow Jones

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Ten banks to sue UBS, BNP-Paribas

BERN: A group of 10 Swiss and foreign banks is to sue
Switzerland's UBS and France's BNP-Paribas over a loan to a
bankrupt Swiss sports marketing firm, the SonntagsZeitung weekly
newspaper reported on Sunday.

In spring 1999, the 10 banks had participated in a 277 million
Swiss franc (151.33 million euros, US$166 million) loan to a
Swiss group, International Sports Media and
Marketing/International Sport and Leisure (ISMM-ISL). The loan
was jointly led by UBS and BNP-Paribas, said SonntagsZeitung.

The group went bankrupt in May 2001 with debts amounting to
several billion Swiss francs.

The 10 banks now say that the two lead-managers did not carry
out proper due diligence and claim 150 millions Swiss francs (100
million euros) in compensation.

Serge Steiner, a spokesman for UBS, confirmed to the weekly
that he was aware of the move but said the banking giant was
"relaxed" about the complaint.

He added that the amount of the claim was a maximum and part
of the brinkmanship that comes before negotiations.

The ten banks include five Swiss and five European
institutions. The five European banks are Bank Austria
Creditanstalt, Bank of Scotland, Germany's Dresdner Bank and
Landesbank Schleswig-Holstein, and France's Natexis Banques
Populaires.

The five Swiss are the cantonal banks of Vaud (BCV), Geneva
(BCGE), Zurich (ZKB), Lucerne and Zug. --AFP

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HK utility's profit hit by SARS

HONG KONG: Hong Kong utility giant Hong Kong and China Gas Co.
Ltd., said Monday its operating profit in the first half to June
was hit by the outbreak of SARS, which led to a fall in gas sales
to the commercial and industrial sectors.

The company reported a first half net profit of HK$1.805
billion (US$231 million), up from the previous year's HK$1.695
billion.

However, stripping out investment income and the share of
profits of associated companies, operating profit, derived mostly
from gas sales, declined to HK$1.912 billion from HK$1.924
billion last year.

In a statement, the company said the outbreak of Severe Acute
Respiratory Syndrome (SARS) in mid-March had a devastating impact
on different business sectors as a result of the drastic fall in
the number of inbound visitors and fragile local consumer
sentiment.

This in turn led to a fall in gas sales to the commercial and
industrial sectors.

The board decided to freeze gas charges for 2004, it said.

It said investment income rose to HK$83.60 million in the
first half from HK$49.70 million the year earlier.

Share of profits from associated companies stood at HK$209.70
million after the year earlier loss of HK$2.70 million.

Shares of Hong Kong and China Gas closed down 15 HK dollar
cents at HK$10.35 on Monday. --AFP