SG to refinance Rp 1t in debt
SG to refinance Rp 1t in debt
Evi Mariani, The Jakarta Post, Jakarta
Publicly listed cement manufacturer PT Semen Gresik (SG) hopes to
generate new loans of about Rp 1 trillion (about US$122 million)
bearing lower interest rates in order to refinance its more
expensive debts.
SG president Satriyo said on the sidelines of a shareholders
meeting on Friday that the company would generate the new loans
by issuing new bonds and borrowing from other sources.
"Semen Gresik and its subsidiaries Semen Padang and Semen
Tonasa need about Rp 1 trillion for the debt refinancing. So far
we have received an offer from a local financial institution to
help us issue bonds worth Rp 500 billion," he said.
He did not identify the underwriter or provide a schedule for
the bond offering.
This step would ease SG's debt burden because the interest
rates of the new loans would be lower, in line with the steady
decline in the interest rate on the one-month Bank Indonesia SBI
promissory notes, to 9.53 percent from 13 percent early this
year.
The decline in the benchmark interest rate has prompted
commercial banks to lower their deposit rates while their lending
rates remain high. In response, indebted companies have been
rushing to issue bonds to take advantage of the declining rate.
According to a company report, as of 2002 SG's debts reached
about Rp 1.4 trillion, of which Rp 790 billion was in banking
loans and Rp 600 billion in bonds.
SG's refinancing plan was agreed on by the shareholders during
their meeting, which also approved the company's dividend
payments after the expected completion of its 2002 financial
report by September.
Since the end of March, the state-owned cement producer has
been fined Rp 1 million a day by the Capital Market Supervisory
Agency because of the failure of its subsidiary, Semen Padang, to
file an audited financial report.
Based on capital market regulations, publicly listed companies
have to submit audited annual financial reports by the end of the
first quarter.
It was also agreed during the meeting on Friday to appoint
Zainal Arifin as president commissioner, replacing Hatanto
Reksodipoetro, and Ignacio Ortiz as the new commissioner
representing Cemex Asia Holdings Ltd of Mexico. He replaces
Fernando A. Gonzalez.
SG is 51 percent owned by the state, 23.46 percent by the
public and 25.54 percent by Cemex Asia Holdings Ltd.
The shareholders and the SG executives plan to hold another
meeting in September, assuming the company's financial report has
already been completed.