Sampoerna to issues Rp 1t in bonds to repay debt

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)