PSSI to issue notes to finance leagues

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)