JAKARTA (TheInsiderStories) – Indonesian paper company, PT Indah Kiat Pulp & Paper Tbk (IDX: INKP) plans to offers Rupiah bond Rp1.8 trillion (US$123.71 million), said the company yesterday. Earlier, the unit of Sinar Mas Group had issued with a principal amounting of Rp1.39 trillion as part of its continues bond with total amount Rp10 trillion.
The Bond consists of three series. Series A with the principal amount of Rp925.60 billion have a fixed interest rate 9.25 percent per annum with a period of 370 days. Series B worth of Rp.597.85 billion with a coupon rate of 10.50 percent per year and a term of three years. Then, Series C with total amount Rp276.55 billion has a fixed rate 11.50 percent a year and a tenure of five years.
Indah Kiat has appointed joint lead underwriters, namely PT BCA Sekuritas, PT Binaartha Sekuritas, PT Sinarmas Sekuritas, PT Sucor Sekuritas, and PT Trimegah Sekuritas Indonesia Tbk (IDX: TRIM). PT Pemeringkat Efek Indonesia has assigned an idA + rating for the local bonds.
The management explained that around 60 percent of the bond proceeds will be used for debt repayment in the form of loan principal and interest. The rest will be used for working capital such as purchasing raw materials, production supporting materials, energy and fuel, packaging goods, and overhead costs.
Last year, the issuer had issue medium-term notes (MTN) worth of Rp2.17 trillion. The parent with PT Bank Sinarmas Tbk (IDX: BSIM), PT Sinarmas Asset Management and PT Asuransi Simas Jiwa bought almost all the MTNs. Indah Kiat offered an interest rate of 10.25 percent for MTN, which will mature in December 2022
In same year, the company has buyback part of Rp4.30 trillion in five MTN series issued in 2017 – 2018. The manufacturer along with its affiliated company, PT Pabrik Kertas Tjiwi Kimia Tbk (IDX: TKIM) business has been under pressures.
In the first semester of 2020, the net profit of Indah Kiat fell 38.42 percent to $203.22 million compared to Last year. The producer’ net income also fell by 6.1 percent to $1.48 billion in the same semester.
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