PLN to float Rp 400b in bonds

JAKARTA (JP): The state-owned electricity firm PT PLN will float five-year bonds worth Rp 400 billion (US$172.4 million) this month in an attempt to solve its financial problems, company president Djiteng Marsoedi said.

"We will issue bonds later this month to improve our performance before listing the shares of our subsidiaries next year," he said yesterday.

PLN intends to list its subsidiaries -- which operate electricity facilities in Java and Bali -- on both local and foreign capital markets in 1997.

The planned bond issuance will be the second this year. In June, PLN floated five-year bonds valued at Rp 1 trillion, the biggest bond listing in the company's history.

At the time of the earlier float, Djiteng said 60 percent of the June float proceeds would be used to fund the construction of transmission and substation projects in Java. The other 40 percent would finance its distribution projects in the islands of Java, Bali, Sumatra, Kalimantan and Sulawesi.

After addressing the American Society of Mechanical Engineers (ASME) Turbo Asia'96 Conference yesterday, Djiteng said the bonds would be listed on both the Jakarta and Surabaya Stock Exchanges one or two months after the public offering.

He admitted PLN business operations are facing financial difficulty.

The Development Finance Comptroller will soon issue an audit report on PLN, which is expected to conclude that the state firm is performing weakly, despite plans for its subsidiaries to go public in less than a year.

"We'll proceed with that plan. We have no intention to postpone the listing plan," Djiteng said. (bnt)