JAKARTA (TheInsiderStories) – The Sinar Mas Group unit, PT Indah Kiat Pulp & Paper Tbk (IDX: INKP) has prepared funds of Rp4.3 trillion (US$307.14 million) to buyback five series of medium term notes (MTN) issued in 2017-2018, said management last week. The company will offer buyback on Nov. 8 – 22 and the repurchase date will be held on Dec. 9.
The company prepared funds of Rp1 trillion to repurchase of MTN has been issued in 2017 with a maximum price of 100 percent of the price of par. For the notes released in 2018, the producer will spend as much as Rp3.30 trillion for a maximum price of 100 percent of the price of par.
Indah Kiat revealed has not obliged to buy all MTNs offered by MTN holders if the repurchase offer from MTN holders exceeds the maximum amount of funds. No further details, how the unit of Asia Pulp & Paper to refinance the notes.
Early of this year, Asia Pulp & Paper (APP) has invest $3.5 billion to build a paper mill in the Andra Prakasam, India. This investment has become the largest foreign direct investment in India in a recent years.
Through this MoU, APP will set up a greenfield in the land on 1,000 hectares and paper manufacturing with a total 5 million ton (MT) pulp, paper, and board. The factory will have a capacity of 5 million per year.
Suresh Kilam, executive director of marketing in APP revealed that the company is planning to produce only packaging paper at the proposed project and will have a daily import and export of materials weighing around 30,000 tons. One-fourth of the production is expected to be utilized for the Indian market.
Last year, Sinar Mas’ other unit PT Purinusa Ekapersada, has set up new corrugated container factory in Bekasi with Japan’ Oji Holdings Corporation. The project need costs around $453.60 million in two years period.
Both companies will set up PT Oji Sinarmas, where Purinusa will hold 45 percent shares in the joint venture company, while Oji to own the majority stakes 55 percent. The plant will produce 5,000 ton of corrugated container per year. The factory its expecting to start the production in January 2020.
Asia Pulp & Paper is a paper producer company which is the holding company of PT Kertas Tjiwi Kimia Tbk (IDX: TKIM) and PT Indah Kiat Pulp and Paper Tbk (IDX: INKP).
Started in 1972 with Tjiwi Kimia producing caustic soda, now the unit of Sinar Mas Group run operations across Indonesia and China with an annual combined pulp, paper, packaging product and converting capacity of over 19 million tons per annum. Today, APP markets its products in more than 120 countries across six continents.
While the Group continues expand their businesses to various sectors to grab the growing market in Indonesia and abroad. The group is a brand of companies, active in six business pillars such as Pulp & Paper, Agri-business & Food, Financial Services, Developer & Real Estate, Communications & Technology and in Energy & Infrastructure.
Sinar Mas founded by Eka Tjipta Widjaja in 1962. He established the company that exported natural products and imported textiles. Since the new order period, Widjaja’ company had never fallen again and is still expanding until now. One of his sons from another wife, Oei Hong Leong, was listed as one of the richest men in Singapore according to a 2013 Forbes rich, with $745 million in wealth.
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