Ultrajaya issues Rp 250b in bonds to finance expansion

JAKARTA (JP): Publicly listed beverage producer PT Ultrajaya Milk Industry & Trading Company plans to issue bonds worth up to Rp 250 billion (US$26.8 million) to raise funds for the financing of its expansion program, the company said on Tuesday.

Ultrajaya said it would issue the bonds in three series under a five year tenure, during a public offering to be held from March 2 to March 8, 2001.

The first series carry a fixed rate of 18.75 percent per annum, while the second offers a stepdown rate from 19.25 percent per annum in the first year to 18.25 percent in the fifth year.

For the third bond series, the company offers an annual interest rate of 18.75 percent in the first year, after which they will float the rate at 3.5 percentage points above the domestic six month deposit rates for the remainder of the tenure.

The bonds will be listed on the Surabaya Stock Exchange.

Acting as the lead underwriters are PT Andalan Artha Advisindo Sekuritas (AAA Securities) and PT Citicorp Securities Indonesia.

The company will also allocate sinking funds, as a security reserve for investors, totaling 5 percent during each of the first three years and another 10 percent for the fourth year, after which it will pay the bonds in full.

"Our sinking fund of 25 percent is still attractive considering that some companies don't offer it at all," director of investment banking at AAA Securities Amiruddin said during Ultrajaya's public expose, which was held to reveal details of the bond scheme.

The company said that 28.6 percent of bond proceeds would be used to build distribution centers, 26.5 percent to develop and launch new products, 20.4 percent to purchase new machinery and 14.3 percent would be used as working capital.

The remaining 10.2 percent of the proceeds will be used to expand Ultrajaya's head office in Bandung and its milk powder factory, the company said.

Last year, state rating agency Pefindo, raised Ultrajaya's bond rating to triple B plus with a stable outlook, rising from triple B with a stable outlook, according to Ultrajaya.

For the third quarter of last year, the company said, it booked Rp 25.5 billion in net profit, more than double the Rp 12.1 billion recorded throughout 1999.

Its total sales were Rp 334.2 billion in 2000, up 31 percent from Rp 255.03 billion the year before.

Ultrajaya was established in 1958 and is the producer of various dairy products and beverages, including milk, juices, cheese and ice creams.

Its network of 35 distribution offices across the country encompasses 25,000 retailers and 2,500 wholesalers.

Ultrajaya is 63.55 percent owned by the public, 26.11 percent by PT Prawirawidjaja and 10.34 percent by Citicorp Capital Asia Ltd. (bkm)