PT Poly Fiber Industry gets $178m syndicated loan

JAKARTA (JP): Polyester chip and yarn maker PT Poly Fiber Industry (Polyfin), a sister company of integrated textile maker PT Artostex, will sign a Rp 423.64 billion (US$178 million) Tuesday.

The loan will be arranged by Malaysia's Asean Bank Malaysia Berhad, Bank International Indonesia, Panin Bank, Bank Umum Nasional and Bank Universal.

"The loan will carry an interest rate of 10.75 percent per annum," Artostex's chief financial officer, Donny P. Pranoto, said over the weekend.

He said the loans would be used to refinance the company's rupiah loans and to increase the firm's operations.

PT Polyfindo is based in Bandung and 90 percent owned by PT Artostex and 10 percent by the Arto Hardy family.

PT Artostext, which the Arto Hardy family control, will issue US$41 million in convertible bonds to support its expansion projects.

PT Pentasena Securities will be the lead underwriter for the bond issue.

The bonds will mature in five years. He did not mention the fixed rate.

He said 60 percent of the proceeds from the bond issue would be used to expand the company's business, 20 percent to increase working capital and 20 percent to pay rupiah loans.

"The bonds will be used basically to strengthen Artostex's capital structure," he said.

Donny said investors like Peregrine Direct Investment, Peregrine Batavia Fund, Hong Kong Shanghai Bank Group's HSBC Group and Istethmar Indonesia had committed to buying the bonds.

"The investors are expected to give a good image about our company," he said.

He said the bond issue was a preliminary step to listing on the Jakarta Stock Exchange next year as the bonds could be converted to shares once the company had gone public.

He said the convertible bond issue was expected improve the firm's debt to equity ratio from 3.8 to 1 to 1.5 to 1.

PT Artostex is an integrated textile producer with assets worth RP 890 billion as of December 1996.

"Total paid-up capital of Artostex and Polyfindo is Rp 230 billion as of December 1996," he said.

In 1996, the firm booked a Rp 30 billion net profit on net revenue of Rp 430 billion.

Polyfin's president, Sinatra Arto Hardy, said total production capacity was 220 tons of polyester yarn and chips a day.

He said 15 percent of the company's products went to Artostext and the remaining 85 percent to domestic and foreign markets. (09)