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.