PT Indorama secures US$175 million in loans

JAKARTA (JP): Publicly listed polyester maker PT Indorama Synthetics has obtained syndicated loans worth US$175 million from 13 international banks.

The company said the agreement for the loans, which mature in three years, was signed in Singapore yesterday would be used to refinance existing borrowings and used for corporate purposes.

The loan's interest rate is 77.5 basis points over the Singapore Inter Bank Offered Rate (SIBOR) for Tranche A, worth $46 million, and 122.5 basis points for Tranche B, worth $129 million.

There is an option for the loans maturity to be extended two years.

The interest and fees is 0.965 percent over SIBOR for Tranche A, which has a spread level of less than 1 percent making it a benchmark deal for an Indonesian industrial firm, the company said.

The loan arrangers included Bankers Trust Company of Hong Kong, Deutsche Morgan Grenfell Ltd of Singapore, Fuji Bank International Indonesia, HSBC Investment Bank Asia Limited of Singapore and ING Barings.

There were 13 bank in the consortium including banks from Japan, Taiwan, Singapore, Hong Kong, Indonesia, the Netherlands, Italy and India. For six of the banks it was their first dealing with Indorama.

"The overwhelming response from the banks for the syndication indicates the banks' interest in Indonesia in general and Indorama in particular," the company said.

PT Indorama Synthetics, which the Asian Institute of Management named the best managed company in Indonesia in 1996 and named the best in investor relations and treatment by Asia Money, makes polyester filament yarns, polyester staple fiber, PET resin, seven blended yarns and polyester fabrics.

The firm recorded a Rp 122 billion ($51.5 million) unaudited net profit in 1996, up from Rp 120.32 billion in 1995.

Indorama's sales turnover was about Rp 678 billion in 1996, up from 1995's Rp 675.9 billion.

The European market makes up 57 percent of total exports of which Asia and the Middle East make up 30 percent, Australia 4 percent and others 9 percent.

The company plans to invest $350 million between 1997 and 1999 on expansion projects, of which $135 million will be used to expand the company's plants in Purwakarta, West Java. (09)