Sierad plans to issue bonds worth Rp 300b

JAKARTA (JP): PT Sierad Produce, a subsidiary of the publicly listed PT Anwar Sierad, plans to issue five year bonds worth Rp 300 billion (US$115.83 million) later this year to finance expansion, a company executive said yesterday.

Senior Vice President Sidhesh Kaul said that Rp 180 billion of the bond proceeds would be used to expand the company's retail business.

"The remaining Rp 120 billion would be used to increase the working capital and refinance debts," he told a press briefing.

PT Trimegah Securitas will become the lead underwriter of the bonds issuance.

He said the bonds, which received a BBB rating from PT Pemeringkat Efek Indonesia (Pefindo), would be 90 percent sold to domestic investors and the remaining 10 percent to foreign investors.

The company's director, F.X. Awi Tantra, said the company booked a net profit of Rp 20 billion in the first quarter, with net sales reaching Rp 134 billion during the period.

He said last year the company's net profit was Rp 27.09 billion, with net sales totaling Rp 454.35 billion.

Anwar Sierad, an integrated poultry company, has entered into joint ventures with overseas companies including Bridor of France to manufacture frozen dough and Triballat of France to produce soya derivatives.

"This strategic alliance is expected to strengthen our retail position," Sidhesh said.

He said total investment for frozen dough would be about US$30 million.

"The plant will be located in Jakarta," he said.

He said total investment for soya derivative plants would be about $50 million.

"About US$25 million will be financed by the company's equity," he said, adding that Sierad Produce would provide $12.5 million and the French Triballat would provide the remaining $12.5 million.

He said the company has obtained a full franchising license to operate Hartz, La Brioche Doree, Del Arte, Kuk-K-Ru and Mrs Roastie in Indonesian and regional markets.

Previously, the company had expanded its fast food business to Shanghai, Hong Kong, Taiwan and Malaysia.

Sidhesh declined to disclose the company's financial target for this year.

He said the current rupiah depreciation would have a small impact on the company's financial performance this year as the company had hedged its dollar position.

"Besides that, our foreign exchange exposure is so small," he said.

But Sidhesh said the currency turbulence which hit the rupiah had forced companies operating in Indonesia to adjust their financial performance this year. (aly)