Sampoerna to issue Rp 1t bonds in October

Sampoerna to issue Rp 1t bonds in October

Rendi A. Witular, The Jakarta Post, Jakarta

Publicly listed cigarette giant PT HM Sampoerna has signed a
preliminary contract for a bond listing with the Surabaya Stock
Exchange (SSX) on Tuesday as part of the company's plan to issue
Rp 1 trillion (US$111 million) worth of bonds in October.

Sampoerna managing director Angky Camaro said the bonds would
have a maturing period of five years, with all proceeds going to
refinance the company's maturing debts next year.

"We expect to issue the bonds in October. We are planning to
hold a public meeting and carry out due diligence for the bonds
on Sept. 28," Angky said after the signing of the contract.

Angky said Sampoerna had appointed HSBC Securities, ABN Amro
and Mandiri Securities as the underwriter of the bonds.
Currently, the company was waiting for rating agency PT Pefindo
to rate the bonds.

For investor valuation, the company will use its first-
semester financial reports for appraisal.

In the first six months ending June, Samporena, the country's
third largest-cigarette producer in terms of production volumes,
recorded a net profit of Rp 1.09 trillion, up against Rp 786
billion for the same period last year.

The company's sales rose by 21 percent to Rp 8.42 trillion in
the first half, from Rp 6.97 trillion from last year.

SSX management has projected new corporate bond issues will
reach around Rp 15 trillion this year, down from Rp 25 trillion
last year, as firms had decided to put off their issues until
after the election.

Between January and July of this year, bond issues by
companies had reached about Rp 12.1 trillion, with several high-
profile companies expected to issue some Rp 3 trillion in bonds
by the end of this year.

Aside from Sampoerna, companies planning to issue bonds
include food companies PT Indofood Sukses Makmur and PT Suba
Indah, financial services firms PT Federal International Finance
and PT Adira Multifinance, and house-builder PT Pembangunan
Perumahan.

At present, the market capitalization of corporate bonds
listed on the bourse totaled Rp 54 trillion, with an average
daily transaction volume of Rp 65 billion.

Government bonds still dominated the market with total
capitalization of Rp 390 trillion and average daily transaction
volumes of Rp 2 trillion.