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Friday, November 26, 2010

Bakrie Plantations appoint Credit Suisse and Deutsche Bank

BI / exchange
15/11/2010
Irvin Avriano A.
Bisnis Indonesia

Bakrie Plantations appoint Credit Suisse and Deutsche Bank

JAKARTA: PT Bakrie Sumatera Plantations Tbk, a listed Bakrie Group plantations company, appoint two global investment banks, Credit Suisse and Deutsche Bank as arranger of issuance of global bonds which amount planned US$200 million.

"The investment bank had eliminate several other banks that participated in the selection of the arranger," said a source in the capital markets whose involved in the transaction to Bisnis yesterday.

The global bond issuance plan was submitted to refinance another bond which will mature in October 2011, with value around US$180 mio.

Bakrie Plantations President Director Ambono Janurianto said that issuance plan will most likely be realized in the beginning of next year as it relates to the validity of his company's financial statements in the 3rdQ/2010.

The report will be used as the basis for the issuance of bonds that are only 6 months.

The company plans to use the basic financial statements of September for the issuance of bonds, so that the limit on bond issuance is on March 2011.

Based on Bloomberg data, the Company has debt maturities on the next year through its subsidiary BSP Finance BV worth IDR1.44 trio and through PT Grahadura Leidong Prima worth IDR135.03 bio.

In connection with the coupons which will be set to global bonds, he once expected to be smaller than the U.S. dollar-denominated bonds issued earlier by the oil palm and rubber company.

When it was confirmed yesterday, Ambono said he was not to provide information related to the bond issuance plan. However, he confirmed 3rdQ/2010 Bakrie Plantations financial statement that have not been published relating to the bond issuance that are still running.

"It's still being processed for issuance of bonds."

In the middle of this year, the company's net profit declined 26.67% from IDR135.18 bio to IDR99.13 billion due to an interest expense increase.

Ambono ever said the company targets this year revenue and net profits growth equal to the 2008 achievement, amounting to IDR2.93 trio, with net income of IDR173.56 bio.

Viviet S. Putri, Senior Analyst PT Anugerah Securindo Indah, assess the company's time issuance plan must compete with potential increasing Bank Indonesia's interest rate which also will be followed by an increasing bank interest.

Both are considered will be impacting on increasing bond coupon that will be issued by new issuers, including Bakrie Sumatra.

"If the issuance can not precede the increasing interest, certainly the bond will not going to have much impact on the Bakrie Plantations financial profile and potentially increase the financial burden. But if can issued more quickly, it will reduce the issuer's financial burden."

She also lamented the financial company still depends on crude palm oil production and fresh fruit bunches (FFB) of palm oil, not like another listed plantations company that began to diversify its production to other commodities such as cocoa, and tea.

According to Viviet, the increase in CPO prices is happening lately is due to the rupiah against the strengthened US dollar, and not because of growing demand.

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