PLN plans Rp 1.5 trillion bond issue

State power company PT Perusahaan Listrik Negara (PLN) plans to issue Rp 1.5 trillion (US$123.26 million) worth of bonds next January to help finance its 10,000-megawatt (MW) power plant program, which is scheduled for completion in 2010. 

President director Fahmi Mochtar said Tuesday the company remained upbeat that the bonds would be attractive to investors, even in the present adverse conditions where the global financial crisis has restricted liquidity. 

"People would refer more to our performance, and don't forget that our market still has around Rp 58 trillion in liquidity," Fahmi said, referring to the total value of bonds which have been matured this year in the domestic market. 

"Overseas investors, from Qatar and Europe, also have shown their interest to invest in our company." 

PLN has appointed Bank CIMB Niaga as a trustee agent for the bond issue, with Trimegah Securities, Indo Premier Securities and Danareksa Securities as underwriters. 

The bonds, Rp 500 billion of which will be in the form of Islamic bonds (sukuk), will be issued in series of five-year and seven-year bonds. 

The annual yield of the five-year bond is based on the interest rate of the government bond (SUN) series of FR0020 plus 50 to 150 basis points. Meanwhile, the yield for the seven-year bond is based on the average yield of SUN series of FR0027 and FR0030, plus 50 to 150 basis points. 

"According to today's interest rates of the preferred bonds series, the PLN five year-bond would give interest between 16.2 and 17.2 percent and the seven-year bond would give 15.7 to 16.7 percent," said Danareksa director Marciano Herman. 

PLN is seeking loans to finance its massive power plant program to meet the increasingly rapid demand for electricity in the country. 

About 6,800 MW of the program is located in Java and Bali, provided by 10 new power plants, while the remaining 3,200 MW is located outside the Java-Bali system and will be generated by about 20 smaller power plants. 
To complete the program by 2010, PLN needs Rp 17.33 trillion to build power stations and Rp 8.58 trillion for transmission systems. 

For next year, PLN will need Rp 3.7 trillion to build power plants and 7.03 trillion to build the transmissions system. 

Up to Rp 10.73 trillion of expenditure is expected to be covered respectively from the state budget (Rp 2.4 trillion), export credits (Rp 5.5 trillion) and lending syndication (Rp 1.33 trillion), according to finance director Setio Anggoro Dewo. 

"We hope the Rp 1.5 trillion from the bonds sales will cover the remaining budget," Setio said. (hwa
Souerce: The Jakarta Post , Jakarta | Wed, 12/03/2008 11:07 AM | Business

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