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Wednesday, June 9, 2010

Pegadaian to issue IDR2 trillion bond: Titan Petrokimia bond value declined into IDR273 billion

Wednesday, 09/06/2010 00:00 WIB

Irvin Avriano A.

Pegadaian to issue IDR2 trillion bond: Titan Petrokimia bond value declined into IDR273 billion

JAKARTA: Following the suspension of bond issuance this year due to the adequate fund possession, Perum Pegadaian (State-owned Pawnshop) now turns to issue IDR1.5-2 trillion bonds.

President director or Pegadaian Chandra Purnama said the company is optimistic to tap the targeted funds despite the volatile financial market condition. "the bond fund is allotted to disburse our financing," he said in Jakarta yesterday.

Boards of directors of pegadaian yesterday held a presentation before the State Enterprise Ministry officials on the bond issuance.

As to Chandra, the company will select the underwriter to issue the bonds.

Management of Pegadaian targets this year the company could rake up IDR75 trillion turnover. In quarter I/2010, the company recorded IDR19 trillion turnover or 25.33 percent as from the total target.

The turnover value swelled up to 60 percent as from IDR48 trillion last year. The company recorded IDR1.1 trillion net profit last year exceeding the State Firm Ministry target of IDR1 trillion.

To support the target this year, the company estimated the need for expansion this year stood at IDR7 trillion. As from the figure, some IDR5 trillion has been achieved from three state banks and IDR300 billion from PT Bank Permata Tbk.

The loan from state banks include the IDR1 trillion provided by PT Bank Mandiri Tbk, IDR3 trillion by PT Bank Negara Indonesia Tbk (BNI), and IDR1 trillion by PT Bank Rakyat Indonesia Tbk (BRI).

July last year, Pegadaian issued XIII/2009 bond series worth IDR1.5 trillion to cover the business expansion.

Early this month, the IX/2002 bond series worth IDR269.55 billion owned by Pegadaian has due date. The early value of the bond was DIR300 billion.

Meanwhile, the bond value and sukuk I/2010 of PT Titan Petrokimia Nusantara, the subsidiary of PT Titan Kimia Nusantara Tbk, in fact only stood at DIR273 billion or lower than the corporate target of IDR500 billion.

That was unveiled in the released research of PT Fitch Ratings Indonesia published yesterday. The research mentioned the company has issued I/2010 conventional bonds worth DIR73 billion and sukuk I/2010 worth IDR200 billion.

The conventional bond issuance is less than those reported to PT Kustodian Sentral Efek Indonesia (KSEI)worth IDR100 billion. The coupon for the 5 years tenured bonds here is 12.35 percent.

The data also confirmed the former Bisnis record mentioning the bond coupon was 12.35 percent.

The due date of the bond is in June 2015 with quarterly coupon payment.

The figure is less than the earlier target of conventional bond issuance of IDR300 billion and DIR200 billion sukuk. When asked, Corporate Secretary of Titan Kimia Merciana Anggani was not available for comment.

However, Director of PT Indo Premier Securities Shiantaraga, as the underwriter of Titan Petrokimia bond issuance conceded the bond issuance was IDR100 billion or less than the previous target.

As to him, the under value bond issuance amount here was due to the coupon demand from investors was out of the emitter set up. "Noting that many called for higher coupon, the emitter opts for the pricing only."

Shiantaraga said the emitter also takes another alternative to collect funds as previously planned. The company plans to issue bonds to finance working capital and purchase of polyethylene raw material, ethylene.

In the research, Fitch set the A+ level as final rating for Titan Petrokimia bond and sukuk, despite the amount of bond issuance is declining due to the fact that Titan Petrokimia capitalization structure, liquidities, and credit profile remain robust.

The rating was still the same as the expectation given by the rating company here last March. The prospect set by the Fitch is on stable level expecting the company to maintain the performance in 2010-2011.

Despite lower from the earlier target, the Fitch also recorded that Titan Petrokimia still has profit from the holding company, Titan Chemicals Corp Bhd which support the 30 percent of raw material stocks for the chemical substance production. (Bisnis/bpj/fsi/iaa)



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