PGN may issue $250m in bonds next month
PGN may issue $250m in bonds next month
The Jakarta Post, Jakarta
State gas distribution company Perusahaan Gas Negara (PGN)
will issue dollar-denominated bonds worth about US$250 million in
August or September, a company official said on Tuesday.
PGN finance director Djoko Pramono said that the proceeds
would be used to help finance a 190-kilometer gas pipeline
project in South Sumatra.
He added that the company would issue another $250 million-
worth of bonds in the first quarter of next year to fund the
development of a gas pipeline from the Duri gas field in Riau to
North Sumatra's Belawan Port.
He said that the company would decide next week on the lead
underwriter for the bond issue. So far, five underwriting firms
had been invited to join the selection process.
He did not name the firms, but earlier reports said that a
number of firms including ABN-Amro, Credit Suisse First Boston
and Merrill Lynch had expressed interest in leading the company's
bond issue and initial public offering (IPO).
ABN-Amro played a major role in the successful IPO of state
Bank Mandiri.
The government also plans an IPO for PGN later this year as
part of a privatization program. Local investment bank PT
Danareksa Sekuritas is reportedly also interested in underwriting
it.
PGN is currently awaiting ratings on the planned bonds from
Standard & Poor's and Moody's Investors Service.
A source familiar with the deal told Dow Jones Newswires that
S&P had informally told PGN it would assign a B rating to the
bonds. Similarly, Moody's also unofficially told the company it
would rate the bonds B1. Both are junk grades.
A number of Indonesian companies have been successful in
raising funds overseas through bond issuance, taking advantage of
foreign investors seeking higher returns amid declining global
interest rates and the fall in value of the U.S. dollar against
major currencies.
Elsewhere, Djoko said that PGN booked a jump in 2002 net
profit to Rp 1.1 trillion, from Rp 317 billion the previous year,
but did not explain why this occurred.