PGN to issue $500 million in bonds next year: Official
PGN to issue $500 million in bonds next year: Official
The Jakarta Post, Jakarta
State-owned gas utility company PT Perusahaan Gas Negara (PGN)
has said it plans to issue bonds worth US$500 million next year
to help finance its gas pipeline projects.
PGN president WMP Simandjuntak told a media conference on
Monday that $100 million would be issued in the first quarter of
the year.
"The (other) $400 million could be issued in two phases -- in
2004 and 2005 -- or all in one year. It depends on the company's
needs," Simandjuntak said after a ceremony to mark the company's
debut on the Jakarta Stock Exchange.
The proceeds from bond issuance will be used to finance
pipeline projects from South Sumatra to West Java and from South
Sumatra to North Sumatra.
Simandjuntak said that the $100 million bond issue plan was
actually part of the $250 million issue originally planned for
August. However, due to the J.W. Marriott bombing blast in
Jakarta, which affected investor appetite, the company scaled
down the size of the issue to $150 million.
PGN recently sold a 30 percent shareholding through an initial
public offering (IPO) at a price of Rp 1,500 per share, raising
around Rp 1.9 trillion in proceeds (US$224.85 million). Some Rp
1.1 trillion of the total proceeds will go to PGN, while the
remainder will be taken by the government to help finance this
year's state budget. The PGN IPO was oversubscribed more than
eight times. The company listed on Monday some 4.32 billion
shares on the Jakarta stock market.
Daniel F. Iskandar, managing director and head of investment
banking at underwriter PT Danareksa Sekuritas, said buyers of the
PGN shares were dominated by foreign investors, which made up 75
percent of the total. The remaining 25 percent were local
investors.
Most, or 93 percent, were institutional while a mere 7 percent
were retail buyers.
The PGN stock market debut helped push the stock exchange
index higher on Monday. The Jakarta Stock Exchange main index
ended up 1.782 or 0.3 percent at 658.522 from the previous close
of 651.672. The volume of shares traded was 1.4 billion shares,
valued at Rp 1.2 trillion.
However, PGN shares ended lower at Rp 1,550 from a midday high
of Rp 1,750.
In the media conference the company also revealed several
projects that would help boost revenue by 15 percent next year
from the Rp 3.6 trillion to Rp 3.8 trillion estimated for this
year.
PGN finance director Joko Pramono said the projects included
gas transmission from Batam to Singapore, and gas distribution to
Riau province, Pekanbaru city, Jambi, Palembang and Lampung.
"The projects will bring an additional 150 million standard
cubic feet of gas per day (MMSCFD). It will boost our revenue
significantly," Joko said.
Most of the natural gas, Joko said, would be used by the pulp
and paper industry in Riau and Jambi, small to medium enterprises
as well as household consumers.
Joko said the company also expected additional natural gas
supply from PT Lapindo Brantas in East Java and BP Muara Karang
in West Java, each amounting to 20 MMSCFD.
The company hopes to post strong growth in the next two years
when some of the projects go online in 2006.
The company will also complete transmission of natural gas
from gas fields operated by state oil and gas firm PT Pertamina
in Prabumulih, South Sumatra, to industrial customers in West
Java.
In 2006, PGN will start transmitting 400 MMSCFD of gas for
power plants operated by state power firm PT PLN, namely Muara
Karang, Muara Tawar and Tanjung Priok, in a bid to tackle power
shortages in West Java.
In the same year, PGN expects to complete construction of a
400-kilometer gas transmission pipeline from Duri-Dumai to Medan,
North Sumatra, as a replacement fuel for power plants.