Pindo Deli to issue Rp 200 billion bonds

JAKARTA (JP): PT Pindo Deli Pulp & Paper Mills, a subsidiary of the Sinar Mas Group, announced yesterday it would issue bonds worth Rp 200 billion (US$84.75 million) in January.

Wijaksana Abadiman, the director of PT Bahana Securities, the lead underwriter, said the bonds would mature in 2002.

The five-year bonds, which will have a face value between Rp 100 million and Rp 1 billion, will have an annual fixed interest rate between 18 percent and 18.25 percent, he said.

"The bonds will be listed on the Surabaya Stock Exchange," he said after presenting the bond plan to local securities analysts and investors.

Pindo Deli vice president Suresh Kilam said about 90 percent of the proceeds would be used to finance the company's continuing program to produce more paper.

He said 10 percent would be used to improve the company's capital structure.

In October last year, the company started building a paper factory in Karawang, West Java. The factory, to produce 652,000 tons of paper yearly, is expected to open next year.

Pindo Deli operates seven paper machines, each capable of producing 210,000 tons a year. It also has a Calcium Carbonate factory which can produce up to 48,000 tons yearly.

"The cost of the expansion program is estimated to reach around $825 million," Pindo Deli director of finance Hendrik Wibawa said.

Around 70 percent of the program will be funded by bank loans, export credits and proceeds from the upcoming bond offering, he said.

He said 30 percent would be financed in-house.

The company's total assets, worth Rp 3.2 trillion in 1995, have been depreciating. They were worth Rp 2.9 trillion in June this year.

Hendrik said total sales for this year were estimated at between Rp 700 billion and Rp 800 billion and net profit between Rp 40 billion and Rp 50 billion.

"The company's 1997 total sales are projected to reach around Rp 1 trillion," Hendrik said.

Pindo Deli, established 1975, acquired 80 percent of Lontar Papyrus Pulp & Paper Industry in May this year.

Lontar can produce 545,000 tons of pulp and 7,500 tons of paper yearly.

Pindo Deli is 92.18 percent owned by PT Purinusa Ekapersada, 2.94 percent by PT Mega Kleenindo, 1.95 percent each by PT Marimba Nugratama and PT Unitama Sartindo and 0.98 percent by PT Intryane Santura.

Pindo Deli has five subsidiaries, which are all fully owned by Pindo, except PT Lontar. (04)