JAKARTA (TheInsiderStories) – PT Chandra Asri Petrochemical Tbk (IDX: CAPC), an integrated petrochemical company in Indonesia, have completed the issuance of local bonds Rp1 trillion (US$68.73 million). The bond has coupons of 8.2 percent for series A with a tenure of three years.
Then, 8.7 percent for series B with a tenure of five years and 9.2 percent for series C with a tenure of seven years. PT BCA Sekuritas and PT Mandiri Sekuritas act as join lead Underwriters.
Erwin Ciputra, president director of Chandra Asri said in a press statement relesed on Sunday (08/30): “This is fully in line with our overall strategy of maintaining strong financial resilience and positioning ourselves strongly for a rebound.”
He added, the proceeds from this bond will be used to fund its working capital as the company prepares to grow sustainably as part of the Integration Master Plan, with the Methyl Tert-butyl Ether and Butene-1 factories, which are expected to start operating in September 2020. This project is expected to further expand the issuer’ revenue stream and strengthen the company’ position in Indonesia’ growing petrochemical industry.
The bond issuance is rated idAA- from PT Pemeringkat Efek Indonesia. The agency assesses the Chandra Asri‘ capacity to meet its long-term financial commitments on these debt securities is very strong, compared to other bond issuers in Indonesia.
Early of this year, the chemical producer owned by tycoon Prajogo Pangestu, 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. The bond have a fixed interest rate 8.7 percent per annum.
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 PT Barito Pacific Tbk (IDX: BRPT), 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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