JAKARTA (TheInsiderStories) – Petrochemical issuer owned by tycoon Prajogo Pangestu, PT Chandra Asri Petrochemical Tbk (IDX: TPIA) will issue bonds as much as Rp1 trillion (US$69.99 million) for business expansion, the company said in its publication today (16/7). The management said the bonds will be offered to investors on July 16 – 30, 2020.
The allotment and distribution of bonds is planned in August 24 and 26 and has target to list the bond on the Indonesia Stock Exchange on August 27. The bonds consist of Series A, B, and C with maturities of 3, 5 and 7 years. However, the company has not set the principal amount of the bonds and interest rates of the various series.
Chandra Asri has appointed underwriters namely PT BCA Sekuritas and PT Mandiri Sekuritas as underwriters. Management said that the funds from the bond issuance will all be used for the company’s working capital.
In the disclosure of information to regulators, Fransiskus Ruly Irawan, Director of the company, revealed that the company will part of the company’s capital expenditure to increase production capacity and verify products.
Last January, the chemical producer offered a third phase sustainable bond in 2020 with a total amount of Rp750 billion with a fixed interest rate of 8.7 percent per annum. In 2018, the company has offered the first phase of bonds amounting to Rp500 billion, followed by the second phase worth Rp750 billion last year.
Last January, the chemical produce offered a third phase sustainable bond in 2020 with a total amount of Rp750 billion (US$52.44 million) with fixed interest rate 8.7 percent per annum. In 2018, the company has offered the first phase of bonds amounting to Rp500 billion, followed by the second phase worth Rp750 billion last year.
The funds will be used for business expansion, the company said. The first phase funds have been fully absorbed, while the second phase has not been fully realized. The producer said the funds will be used to finance its business expansion. Earlier, Chandra Asri considered to release as much as 7.17 billion shares this year, but no further detail the target funds from the rights issue.
All the funds will be used to construct a new petrochemical complex owned by its unit, PT Chandra Asri Perkasa, in Cilegon, West Java. The new project is estimating need investments worth around Rp80 trillion. Besides, rights issue, Chandra Asri also seeks a strategic investor to fund the project.
Last year, President Joko Widodo has inaugurated the new polyethylene plant owned by publicly listed companies in Cilegon. The producer spent $380 million to build the factory with total capacity production 400,000 tons per annum.
With the addition of the new plant, the capacity production of the company increases to 736 thousand tons a year. In the same location, the unit of Barito Pacific, now in the process to develop a second petrochemical complex.
The factory produces polyethylene which is a raw material for supporting infrastructure products and a number of other industries and is intended to meet the needs of the domestic industry.
Its president director, Erwin Ciputra said, the polyethylene factory is expected to be an import substitution and save the country’ foreign exchange amounting to Rp8 trillion. He adds, the new factory has also received a tax holiday policy from the government.
From 2005 to 2019, the company has also been realized investment of Rp28 trillion with various capacity expansion activities, debottlenecking and construction of a new factory. The composition of shareholders consisted of Barito Pacific 41.88 percent, Thailand’ SCG Chemicals Co. Ltd. 30.57 percent, Prajogo Pangestu 13.99 percent, Marigold Resources Pte. 4.75 percent, and public 8.81 percent.
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