PSSI to issue notes to finance leagues
JAKARTA (JP): The Soccer Association of Indonesia (PSSI) will kick off a new method of fund-raising by issuing notes worth a total of Rp 1.5 trillion (US$158 million), the association's treasurer Irawadi D. Hanafi announced Wednesday.
Irawadi said the two-year notes would not carry interest but he gave assurances that investors would gain non-material benefits from the notes.
Proceeds from the notes issue will be invested in bank time deposits and the PSSI will use the interest income to finance the competition, particularly the premier division and first division soccer leagues, and the national team's overseas campaigns.
He said the funds will be deposited in state-owned Bank Mandiri, Bank Negara Indonesia and Bank Central Asia.
"The basic problem for PSSI is that we don't have a stable cash flow because we don't have a fixed source of income. Through this program, we hope to get the financial support that will enable us to proceed with our timetable," Irawadi told a media briefing at the PSSI office in the Bung Karno Sports Complex in Senayan, Central Jakarta.
The notes will be divided into two series based on their nominal values. Serie A will be worth between Rp 1 billion and Rp 10 billion while Serie B will have a nominal value of Rp 100 billion.
Holders of the Serie A notes will not receive any interest but instead they will be permitted to advertise their companies at any soccer events organized by PSSI.
Holders of the Serie B notes will get a maximum of two percent interest on their investment.
"The PSSI bonds do not yield in cash but they offer benefits from the sponsorship of various soccer events where values can be double the interest income from time deposits," he explained.
However, he said he was less than optimistic that the program would automatically attract a large number of investors.
"We are not sure whether the notes will automatically give us big boost. But at least we are trying something in fund-raising for a sporting organization like the PSSI.
"The PSSI, the investors and the banks will all jointly benefit. The investor will not lose their money even though they don't get interest income. Meanwhile, the PSSI gets financial support and the banks get capital."
Irawadi said the maturity period would be set at two years as the current PSSI management would end its tenure in 2003.
Irawadi said the PSSI had also assigned PT Mandiri Sekuritas as arranger, Bank Mandiri as the trustee and PricewaterhouseCoopers (PWC) as the independent auditor.
The auction will be held on Thursday evening at the Mulia Hotel with the number of investors being limited to 100.
PSSI official in charge of marketing and promotion Dimas Wahab said the idea of the notes came after Bank Mandiri President Director E.C.W. Neloe announced last year that the bank had gained up to Rp 40 billion from sponsoring the 2000 national soccer league.
He said Neloe had followed up on the plan with PSSI chairman Agum Gumelar, who is also the Minister of Communications.
"Bank Mandiri agreed to act as our guarantor based on its experience in collaborating with the PSSI. But our program is not like a company that wants to go public. Neither do we want to tread on anyone's toes by stealing investors. This is merely an offer," he said. (ivy)