JAKARTA (TheInsiderStories) – Unit of Sinar Mas Group, PT Indah Kiat Pulp & Paper Tbk (IDX: INKP) sliced the bond issuance from Rp3.55 trillion to Rp3.25 trillion (US$227.27 million), the management announced today. In detailed, Series A with worth Rp1.08 trillion with a coupon rate of 7.25 percent per year with a term of 370 days.
Then, Series B amounted to Rp1.89 trillion with interest rate of 9.50 percent and three years of tenure. And, Series C with valued Rp277.07 billion with coupon rate of 10.25 percent with a period of five years. The notes has received an A+ rating from PT Pemeringkat Efek Indonesia.
Indah Kiat set the offering period take place from March 16 – 17, the allotment date will be on March 19, and listing at the Indonesia Stock Exchange on March 24. The bond issuance helped by PT BCA Sekuritas, PT BNI Sekuritas Indonesia, PT Binaartha Sekuritas, PT BRI Danareksa Sekuritas, PT Maybank Kim Eng Sekuritas, PT Sinarmas Sekuritas, PT Sucor Sekuritas, and PT Trimegah Sekuritas Indonesia Tbk (IDX: TRIM).
The proceeds will be used to repay the company debt and for working capital. Currently, the issuer have a short-term liabilities amounted to $1.80 billion, which is in form of medium term notes (MTN) worth of $79.70 million and bonds payable $95.26 million.
Last year, Indah Kiat had issue 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. The company 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 this year, the two companies through Cakrawala Megah Indah (CMI) as distributors have entered into the e-commerce business by setting up an official store in the market place. While, Tjiwi Kimia will also boost growth this year through tissue-maker, PT OKI Pulp & Paper.
Suhendra Wiriadinata, Director of APP Sinar Mas, projected that the growth in paper sales through Indah Kiat will increase by 10 percent in this year. To reached the targets, the unit has budgeted a capital expenditure worth of S $225 million and OKI Pulp & Paper to spends of $200 million.
He estimated that total production of pulp & paper up to 3 million tones, tissue around 335,000 metric tones, carton box about 3,000 tones per month, and for brown paper by around 146,000 tones in this year. He also projected the sales to increase by around 20 percent compared to 2020.
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