Santika secures foreign loans to build new hotel
Santika secures foreign loans to build new hotel
JAKARTA (JP): PT Hotel Santika Nusajaya, the property division
of media giant Kompas Gramedia Group, has secured loans from a
number of foreign lending institutions to construct a four-star
hotel in Central Jakarta.
Kurnia Munaba, an executive at Hotel Santika Nusajaya, said
the construction of the planned 12-story hotel on Jl. A.K. Sasuit
Tubun, will cost US$40 million.
"We expect $27 million to come from loans and the remainder
from equity," Kurnia said after the signing of loan and
investment agreements between his business group and two
international lending agencies.
Jacoeb Oetomo of the Kompas Gramedia Group, Antonio David of
the International Finance Corporation (IFC), an affiliate of the
World Bank, and Angelito Chua of the Asian Finance and Investment
Corporation (AFIC), an affiliate of the Asian Development Bank,
signed the agreements here yesterday.
Kurnia said that the IFC is committed to extending a loan of
$14 million with a 10-year maturity, and that AFIC has offered $3
million with an eight-year maturity. He declined to reveal the
interest rates of the loans, saying only that they were slightly
above the London Inter-Bank Offered Rate.
He added that his company had also secured loans of $5 million
each from the Nederlanse Financiering-Maatschappij Voor N.V. of
the Netherlands and the Deutsche Investitions und
Entwicklungsgesellschaft GmbH. of Germany. These loans have a 10-
year maturity.
Charles Himawan, a legal advisor for Hotel Santika Nusajaya,
noted that it was actually quite expensive for an Indonesian
company to raise funds overseas.
He said that when an Indonesian firm raises funds abroad, it
has to pay a number of fees, including arrangement and commitment
fees, to foreign lenders. "This is simply because they don't
trust our legal system and law enforcement."
"Nevertheless, raising funds overseas is currently much
cheaper than raising them domestically because of high local
interest rates," Charles said.
He explained that his party had negotiated for two years with
the lending institutions to obtain better terms.
Speaking on the hotel project, Kurnia explained that the
planned hotel, on a 11,000-square-meter plot, was currently under
construction and is expected to be ready by July next year. It
will have 311 rooms.
Hotel Santika Nusajaya currently owns and operates five hotels
in Jakarta, Bandung in West Java, Semarang in Central Java,
Yogyakarta and Bali. It also manages two hotels in Cirebon, West
Java, and in Manado, North Sulawesi. (rid)