Sampoerna to issues Rp 1t in bonds to repay debt

JAKARTA (JP): Publicly listed cigarette producer PT HM Sampoerna will issue Rp 1 trillion (about US$140 million) in bonds in January to repay its foreign debt.

HM Sampoerna chief financial officer Ekadharmajanto Kasih said on Monday the five-year bonds would be offered to the public between Jan. 19 and Jan. 21 next year.

The majority of the bonds' proceeds will be used to refinance the company's $120 million in debt to a group of syndicated banks, he said, adding that the debt matured in 2002.

"The remaining roughly $20 million will be used to strengthen the company's working capital," Ekadharmajanto said.

He said the company would hold on to the proceeds from the bonds allocated for debt refinancing until the syndicated loan matured.

The bonds, which will be listed on the Surabaya Stock Exchange in February, will carry a fixed coupon rate of between 17 percent and 18 percent per annum with semiannual payments, Ekadharmajanto said.

"We are confident our rupiah bonds will gain a good position in the market because they have a competitive coupon rate," Ekadharmajanto said.

The corporate bonds will be competing with a huge batch of government bonds worth up to Rp 200 trillion. The government bonds will be offered starting early next year with coupon rates of between 12 percent and 14 percent per annum.

HM Sampoerna said the Rp 1 trillion bond issue would be the company's first rupiah-denominated bond issue. The company previously issued U.S. dollar-denominated bonds worth some $110 million.

Ekadharmajanto said the company's rupiah bonds received a single A minus rating from local rating agency Pefindo.

PT Danareksa Sekuritas and PT ABN Amro Asia Securities Indonesia will underwrite the bond issue, with state Bank Negara Indonesia acting as the paying bank, the company said.

HM Sampoerna, with total assets of Rp 6.5 trillion as of September, had outstanding short-term and long-term debts of some Rp 3.3 trillion as of June.

The company said a large portion of the debts were in the form of long-term foreign loans. These foreign loans comprise $117.5 million in Yankee bonds which mature in 2006; a $133.5 million syndicated bank loan due at the end of 2002; a $9.9 million financial lease which matures in two to three years; and DM 35.3 million (about $18.4 million) in loans from European financial institution which mature within three years.

HM Sampoerna produced some 7.9 billion cigarettes in the third quarter of this year, compared to six billion cigarettes in the same period last year.

It booked a net profit of Rp 1.07 trillion in the first nine months of the year, a marked increase over the net loss of 530 billion it booked for the whole of last year.

The company's revenue for the first nine months of the year stood at Rp 5.5 trillion, as compared to Rp 3.3 trillion for the whole of last year.

The company's shareholders as of Nov. 1, 1999, are: PT Anggarda Sampoerna with 26.05 percent; Norbax, Inc. (7.15 percent); Crestbridge Limited (6.28 percent); PT Lancar Sampoerna Bestari (5.04 percent); and public, which holds 55.48 percent of the company. (udi)