JAKARTA (TheInsiderStories) – Indonesian property developer, PT Agung Podomoro Land Tbk (IDX: APLN) plans to conduct a rights issue worth of Rp800 billion (US$56.33 million) to pay bonds debt, the company said in a written statement on Friday (9/27).
Corporate Secretary Agung Podomoro Justini Omas said the company had signed a rights issue agreement with PT Indofica and Trihatma Kusuma Haliman which had 80.41 percent and 3.2 percent shares of APLN, respectively. Based on the agreement, Indofica will deposit funds amounting to Rp769.33 billion as an advance for taking shares and Trihatma Kusuma Haliman will deposit Rp30.66 billion.
According to Omas, this capital investment will be converted into shares after obtaining approval at an extraordinary general meeting of shareholders in November 2019.
In addition, the company also obtained a loan of $127 million from Credit Opportunities II Pte to pay bonds. Agung Podomoro Director Cesar M Dela Cruz said the loan facility agreement was signed on September 24, 2019, and guaranteed with the company’s assets.
As planned, the funds will be used to pay the debt of the Rp550 billion. The funds were also used to repay syndicated loans to PT Bank BNP Paribas Indonesia worth of Rp1.3 trillion. The syndicated loan is also allocated to accelerate the payment to several financial institutions, including PT Bank Maybank Indonesia Tbk (IDX: BNII) of Rp750 billion.
Earlier, Omas said, Agung Podomoro would accelerate the payment of phase I sustainable bonds worth Rp99 billion and Phase I Sustainable Bonds in 2014 with a value of Rp451 billion.
Omas added, the acceleration of the Rp550 billion bond repayment showed Agung Podomoro‘s financial capability which was increasingly solid. Besides being supported by the company’s business performance which grew positively this year, the company’s shareholders have a high commitment to the company’s obligations.
Until the first half of 2019, the company recorded marketing sales of Rp884.4 billion from a number of property projects including Podomoro Golf View in Cimanggis, Depok and Podomoro Park, Bandung.
To strengthen its business fundamentals, the company also added business segments that provide recurring income, namely by operating Pullman Ciawi Vimala Hills in May 2019 and Indigo Bali Seminyak. In the final quarter of this year, the plan is to operate Deli Park Mall in Podomoro City Deli Medan.
Recently, Moody’s Investors Service downgraded the corporate family rating of Agung Podomoro to B2 from B1. At the same time, the rater also downgraded the backed senior unsecured rating of the 2024 notes issued by APL Realty Holdings Pte. Ltd., a wholly-owned subsidiary of the property developer firm to B2 from B1.
The notes are guaranteed by the company and some of its subsidiaries. The outlook on all ratings was changed to ratings under review for a downgrade from negative.
Jacintha Poh, a Moody’s VP and senior credit officer said the downgrade reflects Agung Podomoro‘ weak financial management and the expectation that the company’s operating performance is unlikely to improve in 2019. The company’ credit metrics will therefore likely remain weaker than the thresholds set for a B1 rating level.
The developer obtained a term loan facility in May 2019 to address the maturity of its outstanding Rp1.3 trillion bonds over the next 12 months. The company has used part of the loan facility to refinance its Rp750 billion bond that matured on June 6, 2019.
However, Moody’s understands that the availability of funds to refinance the remaining Rp550 billion bonds is now uncertain. The APLN’ refinancing risk is exacerbated by the maturity of its Rp1.3 trillion syndicated loan facility. Agung Podomoro is unable, at this point, to share concrete refinancing plans.
The company is unlikely to achieve around Rp3 trillion of core marketing sales in 2019 and 2020 and conclude the Rp2.5 trillion of industrial land sale at its Podomoro Industrial Park in Karawang, Greater Jakarta.
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