JAKARTA (TheInsiderStories) - Property company, PT Pakuwon Jati Tbk (IDX: PWON) is exploring to issues global bond through its unit Singapore-based, Pakuwon Prima Pte. Ltd. in this year, showed by Fitch Ratings and Moody’s Investor Service reports. The proceeds will uses to redeem the notes will maturing in February 2024 with total amount of US$250 million
Fitch pinned the BB and Moody’s Ba2 ratings on the latest global bond proposal. According to Fitch, the developer high cash balance, low debt levels, and mature investment properties have enabled the company to maintain strong liquidity despite the impact of the pandemic.
The agency also assessed that the government’ efforts to hold a COVID-19 vaccination, coupled with stimulus to improve the economy such as income tax relief, will increase consumption and consumer sentiment. However, any delays related to vaccine launches, including supply shortages, leading to tougher measures of social distancing, are a major risk for economic recovery.
Fitch said, the issuer’ rating is driven by an established investment property portfolio that is strategically located in Jakarta and Surabaya in East Java. This provides a strong net interest coverage of more than 10 times. They also rated that the new assets acquired in November 2020 were relatively small compared to the existing portfolio. Pandemics also have the potential to delay the implementation of greenfield projects.
As of end of 2020, around 89 percent of Pakuwon‘ total debt was unsecured. Moody’s estimates the proportion of unsecured borrowings will remain at more than 90 percent over the next 12 - 18 months. The bonds proposed will also be guaranteed by most of the subsidiaries, which account for nearly all of the company’s earnings.
Pakuwon, which is listed on the Indonesia Stock Exchange was controlled by the Tedja family, develops, manages and operates retail malls, office buildings, hotels, condominium towers and residential townships in Surabaya and Jakarta. End of last year, the unit, PT Pakuwon Permai, purchased three property assets owned by Duniatex Group with total costs Rp1.36 trillion (US$93.79 million).
The assets consisting of shopping center (Hartono Mall Yogyakarta) also Hotel Marriott Yogyakarta and Hartono Solo Baru in Central Java. The director, Minarto Basuki, explained the three assets were owned by PT Delta Merlin Dunia Properti as the building owner and Sumitro as the land owner under Duniatex Group. The acquisition was part of the company’ business expansion outside Surabaya in East Java and Jakarta, he adds.
So far, the company has several investment properties like Tunjungan Plaza, Pakuwon City Mall, Gandaria City Mall, Kota Kasablanka Mall, Pakuwon Mall. Royal Plaza, Blok M Plaza, Ascott Waterplace Surabaya, and Somerset Berlian serviced apartments.
US$1: Rp14,100
Written by Editorial Staff, Email: theinsiderstories@gmail.com
