PGN refinances US$275 million bond

The state-owned distribution gas company, PT Perusahaan Gas Negara Tbk (PGAS), has refinanced global bond worth US$275 million using bank loan facility.
According to a public statement to Indonesia Stock Exchange today, the company made early redemption on December 24 this year. PGAS utilized loan facility of US$275 million arranged by Standard Chartered Bank.   

PGAS via its subsidiary PGN Euro Finance Ltd issued two series of global bond, consisting of US$125 million due on February 24 2014 and US$150 million of notes mature on September 10 2013. Both are listed at Singapore Stock Exchange.
The company has decided to provide an interim dividend of Rp10 per share to its share holders or Rp242.39 billion in total. December 8 2009.
PGAS booked revenue of Rp13.5 trillion in nine months this year, elevated 50% from a year before. The company's September net profit skyrocketed 145% to Rp4.4 trillion compared to last year.
The achievement was mainly contribued by an increase of gas sales volume in distribution business at the end of September this year, reaching 776 (million standard cubic feet per day/MMSCFD), up 37% compared to last year.
Operating income booked a steep jump in revenue to Rp5.9 trillion from the same period last year. Growth performance is reflected by rising EBITDA by 55% to Rp7.1 trillion compared to last year.

Bumi posts lower profit on higher tax

PT Bumi Resources Tbk (BUMI), Indonesia largest coal mine producer, recorded a lower September net profit of around 26% (year on year) due to a higher tax. Bumi, darling subsidiary of Bakrie Group which run by Aburizal Bakrie and family, posted US$360 million of net profit in September this year compared to last year of US$490.15 million.

A source said the company made quarter to quarter better financial performance. In comparison with second quarter this year, Bumi's net profit went up 43% or US$109 million from US$251.90 milion per June to US$360 million at the end of September.     

During second quarter 2009, Bumi made a steep jump of net profit by 102% or US$127.36 to US$251,90 million from previous quarter of US$124.54 million.  

Bumi is now in talks with Chinese fund company Chinese Investment Corporation (CIC) for a possible debt swap.

Under the Capital Market Supervisory Agency revised rule, Bumi is planning to issue 10% of new shares or 1.94 billion of shares, allowing CIC to convert its debt facility into those shares. Bumi is considering to swap CIC's loan into shares at the level price of Rp2,700-Rp2,800. In return, the company's debt exposure will go down of Rp5,43 trillion.

Bumi has delayed extraordinary general meeting which was scheduled on January 7. Still, it is in negotiation with potential strategic investors.

Indah Kiat in red, Tjiwi Kimia profit drops

PT Indah Kiat Pulp & Paper Tbk (INKP), pulp and paper producer under Sinar Mas Group, was suffering September net loss of US$167.51 million compared to a year before of US$238.68 million of net profit.

Along with 'red bottom line', the company net sales plunged 33.69% from US$1.87 billion in September last year to US$1,24 billion this year. Indah Kiat experienced operating loss of US$46.74 million at the end of third quarter this year from profit of US$344.81 million.

Following Indah Kiat worsened performance, PT Pabrik Kertas Tjiwi Kima Tbk  (TKIM) September report was slashed compared to last year.

Company net profit dropped 29.45% from US$55.42 million to US$39.10 million in September 2009, while net sales downed 20.25% from US$1.07 billion to US$855.02 million. Tjiwi Kimia operating profit sank 21.97% from US$98.20 million to US$76.63 million in September this year.

 

Bank Mandiri reigns in 10.61% Garuda

The largest state-owned bank PT Bank Mandiri Tbk (BMRI) has eventually reigned in 10.61% interest in the national biggest flag carrier PT Garuda Indonesia after completing prolonged mandatory convertible bond (MCB) settlement worth Rp1 trillion.

MCB agreement was signed by Garuda Operation Service Director Ari Sapari and Abdul Rachman, Special Asset Management Director today.

Under such agreement, Garuda is agreed to pay Rp50 billion to Bank Mandiri, while the remaining MCB valued Rp967 billion will be converted into Garuda shares.

 

Bumi Serpong to issue 10% new shares

PT Bumi Serpong Damai Tbk (BSDE), property developer under Sinar Mas Group, is considering to issue a maximum 10% of new shares during non pre-emptive rights issue early next year.

The company, which will issue 1.09 billion of new shares maximally, has appointed Macquarie Securities to seek potential stretegic investors.

"We have mandated Macquarie to grab potential strategic investors. Now, we can't say anything about such corporate action until we get approval from share holders," Hermawan Wijaya, BSDE's Director, told Insider Stories today.

Assuming the rights issue price is Rp880 per share, BSDE is able to secure at least Rp959.2 billion. In the next five years, the company needs to seal financing of Rp8 trillion to prop up second round development. BSDE's land bank of 200-300 hectares are availabe for foreign investors.

In an announcement to Indonesia Stock Exchange today, Bumi Serpong is scheduled an extraordinary general meeting on February 8 2010 with main agenda of non pre-emptive rights issue.      

Bumi Serpong's September net profit ballonned 59.57% to Rp202.77 billion compared to last year of Rp127.07 billion. Operating profit grew 16,24% to Rp301.22 billion in September 2009 from the same period last year of Rp259.14 billion, while BSDE's revenue downed 10.42% from Rp972.78 billion to Rp871.37 billion.

Berau Coal to change management

PT Berau Coal, fifth largest coal mining in Indonesia, is planning to hold an extraordinary general meeting today with two main agendas, change management and divestment of 90% interest to PT Recapital Advisors.
A source close to the matter said Recapital will put in some executives in Berau Coal management in coinciding with the divestment. "Recapital will fully control Berau Coal in January next year," the source said.
PT Bukit Mutiara, 99% owned by Recapital, has agreed to acquire 90% interest in Berau from Rizal Risjad, son of Indonesia tycoon Ibrahim Rizad, worth US$1.48 billion.
Referring to the deal, Recapital is fully backed-up by the larget coal mining PT Bumi Resources Tbk (BUMI). The company is now in talks with Chinese Huaneng Power International for a possible strategic cooperation.  

   

Mitra Finance sets 11.5%-13.35% coupon

PT Sinar Mitra Sepadan Finance, leasing company, decided to set 1-3 year bond coupon of 11.5%-13.35%.

The bond, which will be listed in Indonesia Stock Exchange on January 11 nextt year, is underway for registration at the end of this year.

Fitch Ratings awarded BBB+ to Sinar Mitra Finance bond, consisting of three series, with stable prospect. One year A Serie worth Rp85 billion charges an annual coupon of 11.5%, two year B seri valued Rp5 billion bears 13.15%, while the rest due in 3 years gives 13.35%. The company has slashed the bond half from an initial issue of Rp200 billion.

DEWA skyrockets, DOID jumps

PT Darma Henwa Tbk (DEWA) stocks closed today with a steep jump of 8% to Rp135 per share, the highest since November 18.

Some said that a significant leap is due to revenue target set by Darma Henwa of US$269 million and profit after tax of US$77.9 million. But, I think it was not related to company's projection.

"I hear that DEWA is in talks with other coal mining company for possible take over long term contracts," a source said.

Following DEWA, PT Delta Dunia Makmur Tbk (DOID) stock performance today was up 5.59% to Rp1,700, the most since August 27. Northstar owns 20% interest in Delta Dunia, while Aviva Funds Sivac is holding 0.14% and JF Asset Management 0,12%.

Petrosea injects loan into Tirta Kencana

Coal mining contractor PT Petrosea Tbk (PTRO), which is 98.55% owned by engineering and coal mining producer PT Indika Energy Tbk (INDY), has committed to channel Rp4.14 billion of loan to its subsidiary PT Tirta Kencana Cahaya Makmur (TKCM).

The share holder loan, due on November 30 2010 bearing an annual interest of 12,32%, will be used by Tirta Kencana to pay its debt of Rp10.3 billion to PT Bank DBS Indonesia maturing on December 30 2009.

Initially, Tirta Kencana received Rp32 billion of loan and short term debt of Rp15 billion from DBS in 2004. Buy, Tirta Kencana's cash is insufficient to pay the debt   

Petrosea is controlling share holder in Tirta Kencana by taking 47% of interest with two other parties, PT Enviro Nusantara and PT Quarta Desiro with successive ownership of 28% and 25%. Founded in 2004, Tirta Kencana's main business is developing management of water instalation infrastructure in Cikokol, including the operation and maintenance for 15 years.

Coinciding with Petrosea's action, Enviro Nusantara and Quarta Desira have committed to provide share holders loan to Tirta Kencana worth Rp2.46 billion and Rp2.22 billion as well.

Petrosea suffered net loss of US$6.14 million in September compared to net profit of US$7.34 million in September last year. Operating profit jumped from US$10.53 million to US$32.19 million.

The company's cash and cash equivalent in September this year was US$18.18 million, increased from position the same period last year.

Bakrie settles Rp110 billion repo

PT Bakrie & Brothers Tbk (BNBR) just settled its repurchase agreement (repo) of Rp110 billion with two creditors PT Danatama Makmur Tbk and PT Nusa Bintang Lestari this month.
A source familiar with the matter said Bakrie, holding company controlled by Bakrie family, paid Rp55 billion of repo both to Danatama and Nusa Bintang which was taken in September 2009. Bakrie used shares of PT Bumi Resources Tbk and other subsidiaries as repo collateral "Bakrie used bank loan from Bank Bumiputera to refinance its repo," a source said.
Bumi is planning to unveil convertible bond or equity linked notes of US$200 million-US$250 million in January next year.

According to BNBR's handout, the company will use notes proceed to pay short term debts and prop up investment plan. The CB is available for cash settlement as well. The question is at what price Bakrie will convert the notes? Bakrie has long term debt of Rp5.21 trillion due in 2012, short term loan (non repurchase agreement/repo) of Rp1.51 trillion, and repo of Rp220 billion

Green light for DEWA rights issue

New shares issue with preemptive rights of coal mining contractor PT Darma Henwa Tbk (DEWA), subsidiary of PT Bumi Resources Tbk, got an effective statement from Indonesia Capital Market Supervisory Agency (Bapepam-LK) late afternoon today.

Houston Jusuf, President Director of PT Danatama Makmur, standby buyer for the rights issue, said DEWA received a green light after fulfilling some requirements. DEWA has proposed rights issue worth Rp624 billion. The proceed will be utilized to refinance some debts, heavy equipments purchasing, and working capital.

Around 71.51% of total proceeds or US$45 million is allocated to refinance loan, Rp47.5 billion for heavy equipments, while the remaning is for working capital.

In September 2009, DEWA posted US$151 million of revenue, downed 8.7% from a year before. Net profit suffered a steep plunge from US$7.13 billlion in September last year to US$300.000.

Nusantara suffers net loss Rp37.99 billion

Toll road operator PT Nusantara Infrastructure Tbk (META) suffered net loss of Rp37.99 billion in September 2009, plunged 811.42% from net profit a year before of Rp5.34 billion.
In a financial report submitted to Indonesia Stock Exchange today, the company's huge loss was contributed by its subsidiary of Rp40.66 billion.
Nusantara's revenue increased 43.13% from Rp74.08 billion in September last year to Rp106.03 billion at the end of third quarter this year. Operating profit elevated 30.58% to Rp44.97 billion from a year before of Rp34.44 billion.
PT Bosowa Trading Internasional owns 56.45% interest in Nusantara Infrastructure, PT Panin Life Tbk holds 8.82%, while Amari Capital Investment and Credit Suisse Singapore retain 5.18% and 4.44% consecutively.

Gozco unit secures Rp600 billion loan

Subsidiary of PT Gozco Plantation Tbk (GZCO), PT Suryabumi Agrolanggeng, has secured Rp600 billion of credit facility from the country's largest state-owned lender PT Bank Mandiri Tbk (BMRI).

In a public statement to Indonesia Stock Exchange today, Suryabumi, which is 99% controlled by Gozco, signed loan agreement with Bank Mandiri on December 22.

The facility, consisting of two tranches A and B worth Rp212 billion and Rp388 billion, will be used by Suryabumi to prop up business expansion and debt refinancing. The company will use tranche A proceed, due in 2012, for debt refinancing, while the remaining, due in 2016, is proposed for upcoming financing.

Bumi & CIC in talks for debt swap chance

PT Bumi Resources Tbk (BUMI) and China Investment Corporation (CIC) are in talks for a possible debt swap.

A source familiar with the matter said the debt swap will take an opportunity of Bumi's issuing new shares without preemptive rights of maximum 10% or 1.94 billion of shares.

"Bumi will issue 1.94 billion of new shares to CIC, while it can convert the debt into the shares. Still, the biggest stumbling block is conversion price," a source said.

Bumi has mandated PT Danatama Makmur which is run by Houston Jusuf to handle such corporate action. "I hear that Bumi and CIC seem agreed conversion price is around Rp2,700-Rp2,800 per share."

If they reach it, Bumi's debt will shrink by Rp5.43 trillion from around US$1.9 billion. In September, CIC provided high interest loan of US$1.9 billion to Bumi.

Coinciding with the negotiation, Bumi is offering joint action to Huaneng Power International to buy 90% interest in PT Berau Coal, fifth largest coal mining in Indonesia. "CIC will buy Bumi new shares, while Huaneng is goint to participate in Berau Coal deal as a back-up partner for PT Recapital Advisors." a source said.

Elnusa deal on the brink of collapse

Acquisition deal of 37.15% interest in PT Elnusa Tbk (ELSA) worth US$150 million agreed by consortium of Saratoga Investama-Northstar Pacific Partners and PT Tridaya Esta is on the verge of collapse after prolonged uncertainty for more than five consecutive months.

The buyer consortium has warned Tridaya to close the deal before first quarter 2010. "If the deal hasn't closed yet until March 2010, it may be scrapped,"  said Rosan Perkasa Roeslani, Recapital Advisors President Director which is advising the corsortium, as reported by Kontan daily today.

Tridaya owns  37.15% interest in Elnusa, oil and gas servicing company, while PT Pertamina (Persero), the largest state-owned oil and gas producer , retains controlling stakes of 41.1%.

Elnusa posted a steep jump in September net profit of Rp492.54 billion, mainly contributed by net gain of subsidiary sale, from a year before of Rp102.01 billion. September revenue skyrocketed to Rp2.49 trillion from the same period last year of Rp1.65 trillion.

If the deal were closed to cancel, Tridaya should seek new potential bidders which enable a cash settlement. A source said Tridaya has initiated talks with some potential buyers. "Tridaya can  reach new deal with  other buyers before March 2010," the source said.   

   

Bakrie to inject Rp912 billion into ENRG

PT Bakrie & Brothers Tbk (BNBR), holding company controlled by Aburizal Bakrie family, Chairman of Golkar Party, has committed to subscribe at least 18.84% or 4.93 billion of new shares (rights issue) which will be issued by its subsidiary PT Energi Mega Persada Tbk (ENRG).   

Under such commitment, BNBR has to inject Rp912.05 billion of cash into Energi Mega. Bakrie & Brothers is a single majority share holder in Energi Mega by controlling of 43.22% of a total 14.40 billion shares.

Energi Mega, a wounded oil and gas producer with debt burden which was previously arranged by Credit Suisse, darling investment bank for Bakrie Group, has announced Rp4.84 trillion of rights issue plan by issuing 26.18 billion of new shares at Rp185 per share. After completing the issue, Energi Mega's paid capital will be 40.58 billion of shares.

Two standby buyers, PT Danatama Makmur, run by Houston Jusuf which is close to Ari Saptari Hudaja, Energi Mega's President Commissioner, and PT Madani Securites, have agreed  to buy maximum  17.10 billion and 4.04 billion of new shares. Both local brokerages must hammer out total cost of Rp3.91 trillion. They have committed to buy those shares if public share holders don't exercise their rights.

Energi Mega September net loss sharply ballooned to Rp347.92 billion from a year before of Rp71.23 billion. Operating profit plunged to Rp38.84 billion in September 2009 from a year earlier of Rp406.78 billion, while Energi Mega revenue was slightly lower to Rp1.05 trillion from Rp1.36 trillion.

 

Garibaldi Thohir offloads Adaro

Garibaldi Thohir, President Director of PT Adaro Energy Tbk (ADRO), sold 2.5 million shares into the market at Rp1,740 per share or Rp4,35 billion.

In a public statement to Indonesia Stock Exchange recently, Garibaldi sold its shares on December 17. Before he sold small part of its shares, he owned 7.13% of ADRO or 2.28 billion shares on November 30 2009. The company's controlling share holder is PT Adaro Strategic Investments of 43.91% and GSCO-Adcorp Holdings owns 5.71%.

Subsidiary of ADRO, PT Adaro Indonesia made a pile in October. The company secured US$800 million 10 years senior notes. In a press release, the notes, which provide an annual interest rate of 7.625%, are guaranteed by Adaro Energy.

 

Huaneng Power is back for Berau Coal

Chinese Huaneng Power International Inc is in intensive talks with PT Bumi Resources Tbk (BUMI) for joint action possibility to acquire 90% stakes in holding company of PT Berau Coal, Indonesia's fifth largest coal producer, PT Armadian Tritunggal, worth US$1.48 billion.

A source familiar with the matter said Bumi has opened an opportunity to join strategic investors on its projects, including in Berau. "Bumi hopes that Huaneng Power enables to enter Berau Coal. They can set up financing agreement, while Bumi needs financial support to back-up PT Recapital Advisors in the acquistion," a source said. During the talks, Huaneng is adviced by financial advisor Nomura.

According to Berau financing structure, Bumi has to provide US$300 million of subordinated loan to PT Bukit Mutiara, a special purpose vehicle used by Recapital to buy Berau. Recapital owns 99% stakes in Bukit Mutiara.

Huaneng Power and its subsidiaries develop, construct, operate, and manage large power plants in China. As of June 30, 2007, the company’s attributable and controllable installed capacity were respectively 31,747MW and 36,024MW, making it one of the largest listed power producers in China.

Huaneng previously was interested to bid Berau. But, it decided to pull out from the deal, allowing Recapital and PT Indika Energy Tbk were in shortlisted.

Gunawan Steel plunges 18.13% on first debut

PT Gunawan Dianjaya Steel Tbk (GDST) closed its first debut in red. The company's stocks plunged 18.13% to a closing price of Rp131 per share, making its market capitalization of Rp1.07 trillion, from IPO level of Rp160 due to sell-off.

Gunawan Steel, which is producing of hot rolled steel plate, expects net loss of Rp115 billion in 2009 compared to a profit of Rp83 billion last year.

The company said it secured Rp160 billion of fresh cash from its initial public offering this month. Proceeds will help pay down debt.

“Our outstanding debt to Stemcor declined to US$27 million from about US$57 million earlier this year,” said Gunawan director Hadi Sutjipto last month.

The company said in June it would use 70% of the IPO proceeds to pay part of its then Rp527 billion debt to Stemcor.

Rudiantara leaves PLN

PT Perusahaan Listrik Negara (PLN) will be left by its Vice President Director Rudiantara. He determined to resign from his current position. "It is true, I submited resignation letter to Minister of State Owned Enterprise Mustafa Abubakar today afternoon," he said as quoted by Detikcom today.

The resignation is following appointment of Dahlan Iskan, owner one of the largest publication companies group under Jawa Pos, as new PLN President Director

Rudiantara has been woriking with PLN as Vice President Director for two years. His famed role was related with PLN financing finding both dollar and rupiah to support new aditional power plants.

Rudiantara was Vice President Director of state owned cement producer PT Semen Gresik Tbk before leaving to PLN.

Barito Pacific net profit jumps 208.42%

PT Barito Pacific Tbk (BRPT), holding company owned by Indonesian tycoon Prajogo Pangestu, experienced net profit jump of 208.42% in September 2009 from a year before.

A source said Barito booked net profit of Rp560.42 billion in September this year from net loss of Rp516.92 billion.

In June 2009, the company earned Rp383.70 billion of net profit, 537.71% jump from March's position which was in net loss of Rp87.66 billion.

PT Tri Polyta Indonesia Tbk (TPIA), Barito's subsidiary, posted September net profit of Rp470 billion, 171% jump from the same period last year of Rp174 billion.

Tri Polyta, which is 75.95% controlled by Barito, said the company booked an increase in net profit due to higher sales volume until the end of September 2009 to 299,088 ton, 18% increase from a year before of 252,479 ton, which represented a growing polypropylene domestic market.

Rosinu resigns from Trimegah

A fame director PT Trimegah Securities Tbk, Rosinu, has decided to resign from its prolonged carrier at the brokerage.

A source familiar with the issue said Rosinu’s resignation is expected effective in January 2010.

“He is pondering to move out from financial business. Rosinu may enroll other sector, which is syariah related after taking couple months holiday,” a source said today.

Rosinu is one of stellar in Indonesia capital market. He has been working Trimegah for 13 years. He initiated his carrier at PT Tigaraksa Satria (1987-1989) before moving into bank businesses at PT Bank Duta (1989-1991), PT BSB Bank (1991-1993), and PT Bank Bira (1993-1997).

As Trimegah Corporate Secretary until nowadays, Rosinu has good relationship with stock market journalist. He was one of director development candidate for Bursa Efek Indonesia led by Made Rugeh Ramia, President Director of PT Panin Sekuritas Tbk.

AKR Corporindo eyes rights issue Rp539.79 billion

PT AKR Corporindo Tbk (AKRA) is eyeing fresh capital of Rp539.79 billion from issuing a maximum new shares of 627.66 million at Rp860 per share.

In public statement today, the company, which is sorbitol producer as well, provided new shares with ratio of five existing shares have rights to buy one new share.

AKR will use the proceed of Rp307 billion to support additional facilities for terminal and jetties in South Kalimantan, West Kalimantan, North Sumatra, and South Sumatra, while the remining is for working capital.

In September 2009, AKR posted Rp6.31 trillion of revenue, operating profit of Rp426.52 billion, and Rp191.84 billion of net profit. The company's liabilities were Rp3.46 trillion with total equity of Rp1.67 trillion. PT Arthakencana Rayatama owns 70.82% of AKR and public is holding the remaining stake.

BUMI delays EGM, deal talk uncertain?

PT Bumi Resources Tbk (BUMI) suddently announced today that it delays extraordinary general meeting which will be scheduled on January 7 2010.

In a public announcement to Indonesia Stock Exchange today, Bumi, the biggest coal miner in Indonesia, said the delay is due to deal talk with potential strategic partners hasn't finished yet. 

Previously, Bumi has set up EGM on January 7 2010 in order to get approval for 10% of secondary offering.

The company enables to issue 1.94 billion of new shares to potential strategic investors. A market speculation said Bumi and China Investment Corporation (CIC) are still in talk. But, the rumour said the deal meets stumbling block.
BUMI stock dropped 6.67% or Rp150 to Rp2,100 per share at closing, 6 successive days of sinking.

Assuming BUMI will issue new shares at Rp2,100, it will gain Rp4.07 trillion of fresh money from investor.

Medco to unveil US$100 million MTN

PT Medco Energi Internasional Tbk (MEDC) is planning to launch medium term notes (MTN) of US$100 million next year.

Oil and gas company, which is controlled by Panigoro family, will use proceeds from MTN to prop up debt refinancing, investment, and working capital. "The proposed MTN has been rated AA- by PT Pemeringkat Efek Indonesia," said a press release submitted today.

The ratings reflect MEDC’s relatively competitive lifting cost and above average liquidity. The ratings are constrained by weakening financial performance, decreasing production from limited producing fields, delay in several major projects, and more aggressive financial leverage resulting from sizeable capital expenditure.

A negative outlook is assigned to Medco's rating to anticipate the company's worse than expected financial performance. These include further negative impact from fluctuating oil and gas prices, lower oil and gas production and delays in its major projects.

Medco is the largest privately-owned independent oil and gas company in Indonesia, with the latest estimated proven crude oil reserves of 64 million barrel oil equivalent and natural gas of 25 mmboe from fields located in Sumatra, Kalimantan, Sulawesi, East Java, and United States. Around 50.7% of Medco is owned by Encore Energy Pte. Ltd and public holds 37.6% and 11.7% of treasury shares. Encore Energy is owned by Panigoro family through Encore International (60.6%), and Mitsubishi Corp. (39.4%).

Tri Polyta posts higher net profit

PT Tri Polyta Indonesia Tbk (TPIA), which is controlled by PT Barito Pacific Tbk, posted September net profit of Rp470 billion, 171% jump from the same period last year of Rp174 billion.

In a press statement today, Tri Polyta, which is 75.95% controlled by Barito, said the company booked an increase in net profit due to higher sales volume until the end of September 2009 to 299,088 ton, 18% increase from a year before of 252,479 ton, which represented a growing polypropylene domestic market.

AKR Corporindo net profit drops 27.86%

PT AKR Corporindo Tbk (AKRA) in September 2009 posted slightly lower net profit of 8.83% due to sinking revenue and operating profit.

The company, which has four main businesses petroleum distribution, chemical, manufacturing, and logistic, booked September 2009's net profit of Rp191.84 billion from a year ahead of Rp265.95 billion.

AKRA sales in September 2009 was Rp6.31 trillion, downed 14.61% from the same period last year of Rp7.39 trillion. Operating profit shrank 8.83% from Rp467.81 billion in September last year to Rp426.52 billion.

AKR's petroleum sales volume recorded 40% growth in September this year of 705,170 KL due to higher sales of high speed diesel in Kalimantan. Sales revenue of Petroleum business amounted to Rp3,34 trillion in September this year (53% of total sales).
Basic chemicals sales revenue in 9M 2009 was Rp 1,25 trillion , a reduction of 20% YOY despite a rise in

Q3 2009 volumes. Business of manufacturing made revenue Rp1.47 trillion in 9M 2009. Logistic sales revenue in September 2009 was Rp268 billion.

Sweet Dian Swastatika, bitter Garda Buana

Most of 12 new stock listings this year have provided investors with more sweet taste, but they have experienced bitter IPOs as well.

New comer in Indonesia capital market, PT Dian Swastatika Sentosa, subsidiary of Sinar Mas Group which has main businees in mining and power plant, made the best performance. PT OSK Nusandana Securities was underwriter of Dian Swastatika.

The stocks recorded 270% jump from IPO price, while PT Inovisi Infracom Tbk, telecommunication company, and PT Bumi Citra Permai Tbk, gave investors with succesive gains of 268% and 131.82%.

Which IPOs are the worst? PT Garda Tujuh Buana Tbk, coal mining company, posted the worst performance. Helped by underwriter PT Bahana Securities, the stock downed 38.26% from its initial level as well as PT Katarina Utama Tbk which made the second worst performance stock this year.

Up to last Thursday, Katarina tumbled 32.5% from its IPO price, while PT Latinusa Tbk, PT Trikomsel Oke Tbk, and PT BW Plantation Tbk slashed 10.77%, 6.67%, and 5.45%.

The only state owned bank PT Bank Tabungan Negara Tbk, which was expected to record hight during its debut, gained 5% due to the worsen market, dragging down by The Bakries' tumble. 

  

The Bakries remain intact

For the entire this week, still, The Bakries reigned in Indonesia stock market. Total transaction of seven publicly listed companies, so called The Bakries, which belongs to Aburizal Bakrie family, Chairman of Golkar Party, remained intact.

In four consecutive trading days (Dec 14-17), The Bakries, consisting of PT Bakrie & Brothers Tbk (BNBR), PT Bakrie Telecom Tbk (BTEL), PT Bumi Resources Tbk (BUMI), PT Darma Henwa Tbk (DEWA), PT Bakrieland Development Tbk (ELTY), PT Energi Mega Persada Tbk, and PT Bakrie Sumatera Plantations Tbk (UNSP),  made transaction of Rp3.05 trillion (US$300 million).

The Bakries shares trading value was 23.59% of four consecutive daily transaction in Indonesia Stock Exchange of Rp12.93 trillion.

Prolonged domination of The Bakries in Indonesia stock market is mostly because of their gigantic shares outstanding. With shares outstanding of nearly 100 billion, the largest ever in the history of Indonesia capital market, it is easy for BNBR to batter Telekomunikasi Indonesia Tbk (TLKM) which now has the larget market capitalization in the country.
Of The Bakries transaction, BUMI made the biggest contributor of Rp2.29 trillion, followed by BNBR of Rp263.76 billion in four days.

Who can emulate The Bakries? For sure, state owned enterprises (SOE) stocks are the answer. But, 16 SOEs in the market are not powerful enough to devastate The Bakries domination. Even the new comer PT Bank Tabungan Negara Tbk (BBTN) failed to record high during its debut on Thursday due to BUMI's sinking which dragged down the entire market.

Shares transaction of 16 SEOs on Dec 14-17 was Rp2.96 trillion or 22.92% of the country's total daily transaction of Rp12.92 trillion. TLKM ranked first with four days transaction of Rp791,42 billion, while PT Perusahaan Gas Negara Tbk (PGAS) ranked second, posted trading value of Rp400.51 billion.

If the government and Indonesia Stock Exchange want to sink The Bakries domination, additional secondary offering is affordable for SEOs or make bigger IPO for new comer. PT Krakatau Steel and PT Garuda Indonesia have an opportunity to set bigger shares volume in initial offering.

Who is next? In the third position, Astra International Group made total shares transaction of Rp838.59 billion or 6.49% of four days market trading value. Still, the biggest contributor was PT Astra International Tbk (ASII) itself of Rp401.45 billion. Astra Group is far different from The Bakries. Astra Group companies have tiny shares outstanding, so their market capitalizations are smaler than SOEs and The Bakries. All Astra Group firms are cash rich. ASII, holding company of Astra Group, never involve, pledge, repurchase agreement (repo) their subsidiaris shares for debt. Banks loan or friendly rights issue are Astra Group preference.

Salim Group, which is lead by Anthony Salim, ranked fourth with total transaction of Rp410.67 billion, 3.18% of Indonesia stock market trading value on Dec.14-17. Three flagship companies PT Indofood Sukses Makmur Tbk (INDF), PT Indocement Tunggal Prakarsa Tbk (INTP), and PT PP London Sumatra Indonesia Tbk (LSIP) are the biggest Salim firms in the market.

Sinar Mas Group ranked fifth with total trading value of Rp91.84 billion or 0.71% of the country total transaction. 

Chandra Asri seizes US$15 million L/C facility

PT Chandra Asri Petrochemical Center has obtained letter of credit (L/C) or standby leter of credit facility worth US$15 million from one of the biggest state owned bank PT Bank Negara Indonesia Tbk (BBNI).

Chandra Asri, Indonesia largest petrochemical producer, and BNI signed corporate guarantee agreement regarding to the facility on December 15 2009. Following the facility, PT Barito Pacific Tbk, a holding company controlled by Indonesian tycoon Prajogo Pangestu and owns 70% of Chandra Asri, has provided a corporate guarantee for 70% of the facility.

Chandra Asri is the only naphtha cracker in Indonesia. The annual plant capacity for ethylene is 600,000 metric ton, 320,000 metric ton of propylene, crude C4 of 220,000 metric ton, and py-gas of 280,000 metric ton.

In October, Chandra Asri was planning to inveil US$250 million of high yield bond soon to snap up fresh cash from buoyant global debt market. The company has designated two joint lead underwriter DBS Securities and Deutsche Bank. But, until now, there is no further information about the bond issue. Barito acquired Chandra Asri worth US$1.05 billion in 2007 by using fresh money from rights issue of Rp9.16 trillion.

Forex gain saves Truba bottom line

Bottom line of PT Truba Alam Manunggal Engineering Tbk (TRUB) is underpinned by foreign exchange gain.

Without booking such forex gain, Truba, an engineering company, is suffering a steep drop in net profit.

According to financial report submitted to Indonesia Stock Exchange today, Truba posted a flat revenue of Rp2.07 trillion (US$220 million) in the third quarter 2009, while operating income suffered a sharp drop 77.47% from Rp230.78 billion in September last year to Rp52 billion.

The company's bottom line in September 2009 was Rp318.07 billion, increased 64.79% from a year before of Rp193.01 billion due to forex gain of Rp308.02 billion.   

4WEXHY4BCVPC

Latinusa secures Q1 2010 order book

PT Pelat Timah Nusantara Tbk or Latinusa (NIKL) has sealed order book of 27,000 ton of tin plate in the first quarter next year.

In a press statement today, the company is able to deliver the order next year after securing raw material from Nippont Steel, the second largest steel maker in the global market after Archelor Mittal.

"The biggest stumbling block for Latinusa is raw materials availability. So far, we can jack-up output due to lack of raw materials," Erwin, Latinusa's Finance Director, said today morning.

In the second quarter next yeat, Latinusa is targeting sales volume of 36,000 ton of tin plate. Latinusa is the only tin plate producer in Indonesia, which just enrolled the stock market last Monday, with an annual installed production of 130,000 ton of tin plate. Latinusa was majority controlled by state owned steel maker PT Krakatau Steel.

Coinciding with the IPO, Nippont Steel has taken the place by acquiring 55% of Latinusa shares worth US$59.95 million from Krakatau Steel, making the Japanese steel producer as a single majority share holder in Latinusa. Krakatau owns 20.1% interest in Latinusa, while PT Baruna Inti Lestari holds 4.9% and 20% has gone to public.

Erwin said Latinusa estimates sales volume this year will be around 90,000 ton of tin plate with Rp37 billion of net profit (US$34 million) or Rp14.68 per share and Rp1.1 trillion of revenue. The company's sales volume next year is predicted around 120,000 ton, following revenue and net profit of Rp1.56 trillion and Rp90.95 billion or Rp36.09 per share.

"During a public expose, we said that our net profit this year is Rp32 billion. But, we are optimistic to reach Rp37 billion," he said. NIKL shares are traded at Rp300 per share or estimated 20.43x P/E 2009 and 8.31x P/E 2010. In years, Latinusa provides dividend at ratio of 30%-40% to share holders. Erwin said Latinusa management will submit dividend to share holdes next year. But, let's share holders decide it.

The gigantic Bakries

Can you imagine how big is market capitalization of seven publicly listed companies under Bakrie Group, so called The Bakries, after new shares and warrants issue?

The shares issue will transform The Bakries into a gigantic group of companies in the market.

I am worried daily trading value of The Bakries will outstrip more than a half of Indonesia daily turnover. Now, average of daily trading value of The Bakries are 20%-40% of nation's daily transaction.

Total market capitalization of The Bakries yesterday was Rp68.91 trillion (US$7.3 billion). The biggest contributor remained PT Bumi Resources Tbk (BUMI), the darling coal producer for Bakrie family, with market capitalization Rp45.59 trillion.

PT Bakrie & Brothers Tbk (BNBR) ranked two with market capitalization of Rp8.25 trillion because it has shares capital paid in of 93.72 billion shares, the largest ever in the history of Indonesia stock market. If BNBR shares could reach Rp1,000, the company's market capitalization would be Rp93,72 trillion. How fantastic it is!

The third and fourth were PT Bakrieland Development Tbk (ELTY), property arm of The Bakries, and PT Bakrie Telecom Tbk (BTEL), CDMA-based telephone operator with consecutive market capitalizations of Rp4.08 trillion and Rp4.04 trillion.

But, PT Energi Mega Persada Tbk (ENRG), oil and gas company, PT Bakrie Sumatera Plantations Tbk (UNSP), cpo producer, and coal mining contractor PT Darma Henwa Tbk (DEWA) recently announced rights and warrants issue.

Massive rights issue

Energi Mega aims to offload additional 26.18 billion of new shares into the market worth Rp4.84 trillion, 1.71 fold of yesterday market capitalization. After issuing rights and warrants, the company's total shares out will be 45.49 billion shares or 3.15 times of its outstanding shares of 14.40 billion units.

Bakrie Plantations announced its plan to inundate market with 9.47 billion of new shares worth Rp4.97 trillion, 2.34 fold of yesterday market capitalization. The company's outstanding shares after rights issue and warrants will be 13.88 billion, 367% higher than today of 3.78 billion units.

Darma Henwa revealed rights issue program by issuing 6.24 billion of new shares worth Rp624.39 billion, enlarging its outstanding shares from 15.61 billion units to 21.85 billion units.

In total, three companies will inundate the stock market with 41.89 billion of new shares worth Rp10.42 trillion (US$1.11 billion).

For The Bakries, rights issue, warrants, and debt-linked equity are the most favourite financing scheme. Track records revealed that The Bakries mostly take the scheme. It is rare and wierd for The Bakries to use cash aquisition. Leverage buyout is the most they like.

This is why acquisitions in many cases at The Bakries mostly elevate their debt burden. When their leverage have peaked, The Bakries reduce the debt ratio by making additional new shares. But, sometimes they have to pay the loan using another loan or refinancing. BUMI did it. Take high interest loan from China Investment Corporation to refinance debt facilities arranged by Credit Suisse.

What is the impact for the stock market? The more The Bakries  offload new shares, the bigger the transaction and market capitalization will be. In return, up and down of The Bakries will easily influence Indonesia stock market. It was not surprissed when Indonesia stock market performed well in Asia or even globally in 2007. Thank to The Bakries.

The problem appeared when The Bakries shares was dragging dawn all the market in October last year. Before suspending the whole market, Indonesia Stock Exchange (IDX) firstly stoped The Bakries' shares. It was to save the composite index, but The Bakrie took advantage.

How is in the future?

In my opinion, The Bakries favourite way to enlarge shares out must be closely watched by IDX and The Capital Market Supervisory Agency (Bapepam-LK). For sure, if The Bakries do it over and over, it is not good for Indonesia stock market which will be dependent on The Bakries.

Nowadays, there is no regulation which could be taken by Bapepam-LK or IDX to limit The Bakries rights issue. But, at least the regulation could ask The Bakries to review such corporate actions or provide a maximum number of new shares out. Dilutive effect is also unfair for public investors.

If IDX is too afraid to do so, it may ask help to government to make more public for state owned enterprises. I don't believe it will work. If there is no action from the stock regulators, sooner or later  The Bakries would reign in the market.

    

    

Indosat to launch US dollar bonds

PT Indosat Tbk, the second biggest cellular operator in Indonesia, is planning to unveil dollar denominated bonds in first half next year 2010.

The company will use proceed to refinance its 7.75% bond worth US$247 million which matures in 2010. The 7.125% of Indosat bond value US$250 million, due in 2011, gives interest of 7.125%.

Indosat management will sound this plan to investor during non deal roadshow in Singapore, Hong Kong, Europe and New York.

Indosat's Commisioner Rachmat Gobel admited that management has received permission from board of commissioner and ultimate shareholders to do that plans. But he declined to explain further detail.

Last year after Qatar Telecom acquired 65% shares of Indosat. The company set up a buyback offer to all  bond holders at the price of 101% with help of HSBC and Goldman Sachs.

BNBR denies to issue new shares

PT Bakrie & Brothers Tbk (BNBR) has denied a market rumour that the company is planning to issue new shares with preemptive rights at the price of Rp65 per share.

According to a daily report from a foriegn brokerage, Bakrie confirmed yesterday not to issue new shares. The company is planning to launch convertible bond or equity linked notes of US$200 million-US$250 million early next year.

Bakrie needs US$300 million to subscribe new shares of its subsidiaries via rights issue. PT Bakrie Sumatera Plantations Tbk (UNSP), CPO producer, is planning to issue 9.47 billion of new shares at the price of Rp525 per share, targeting to grab fresh cash of Rp4.97 trillion.

PT Energi Mega Persada Tbk, oil and gas company, has issued rights issue plan of 26.18 billion of new shares at Rp185, eyeing money of Ro4.84 trillion.

 

United Tractors to buy Asmin Bara & Bahari Sebuku?

PT United Tractors Tbk (UNTR), the biggest heavy equipment distributor in Indonesia, is rumoured to buy two coal producers, PT Asmin Bara Baronang and PT Bahari Cakrawala Sebuku.

As reported by Kontan daily today, UNTR, subsidiary of PT Astra International Tbk, national largest automotive distributor, is underway to acquire two coal mining companies. "UNTR is setting a due diligence on two coal minings until end of this year. Acquisition is targeted to complete early next year," said UNTR Corporate Secretary Sara K. Loebis.

Asmin Bara has operated its commercial in 2001. Controlling share holder of Asmin Bara is Mandira Sanni Pratama (60%), while the remaining is Andalan Teguh Berjaya. Bahari Sebuku has initiated its business in 1994. It has two coal projects called Sebuku in Southern Kalimantan and Jembayang in Eastern Kalimantan. At the end of 2008, Bahari Sebuku was majority owned by Straits Asia Resources Ltd and the rest is belong to Reyka Wahana Digdjaja.

UNTR allocates US$70 million and cash from rights issue of US$380 million to support coal acquisitions. The company's cash and cash equivalent at the end of September 2009 was Rp2.38 trillion.

Coal mining business is expected to contribute 35% of UNTR's consolidated revenue, while it made only 10% in the last quarter this year. United Tractors controlls interest in two coal mining companies, PT Tuah Turangga Agung and PT Dasa Eka Jasatama. UNTR is now traded up 0.99% to Rp15,200.           

Indofood's net profit jumps 42.34%

PT Indofood Sukses Makmur Tbk (INDF), an integrated food company, posted a higher operating margin in the third quarter 2009 due to an improve of operating income, while net sales slightly downed 5.7%.

At the end of September 2009, Indofood, which is controlled by Salim family, booked operating income of Rp3.73 trillion, 4.2% increase from the same period last year of Rp3.58 trillion. Operating margin in the last quarter 2009 was 13.23%, higher than a year earlier of 11.97%.

But, net sales of the noodle producer with its brand dubbed Indomie downed 5.7% from Rp29.90 trillion at the end of third quarter last year to Rp28.20 trillion. The fall of CPO prices and other commodities were the biggest contributor for the net sales decrease.

Indofood made a 42.34% growth in net income during the third quarter this year to Rp1.58 trillion from a year earlier of Rp1.11 trillion.

The consumer branded product group (CBP), consisting of noodles, dairy, food seasonings, snack foods, nutrition & special foods division, contributed 43% to Indofood's consolidated net sales.

Bogasari group contributed 29% to Indofood's consolidated net sales, declined from 31% due to lower  in sales value as a result of lower flour price. Contribution of Agribusiness group tumbled to 19% from 27% mainly due to lower CPO and rubber prices. Contribution from distribution group also downed to 8% from 12% principally because the dairy sales is now included in the CBP Group.

Bakrie Plantation prices rights issue Rp525

PT Bakrie Sumatera Plantations Tbk (UNSP) has determined to issue 9.47 billion of new shares with a subscription price of Rp525 per share. Bakrie Plantations, CPO producer which is controlled by PT Bakrie & Brothers Tbk, can generate fresh money of Rp4.97 trillion from rights issue.

A source familiar with the matter said following rights issue, Bakrie Plantations is planning to unveil 631.33 million of warrants serie II. PT Danatama Makmur is underwriter of the rights issue.

Of the total fresh cash grabbed from rights issue, Rp3.16 trilliun will be used by the company to jack up capital of its subsidiary to underpin acquisitions.

Bakrie Plantations will acquire 100% shares in PT Domas Agrointi Prima worth US$110 million or Rp1.1 trillion. Domas Agrointi is a holding company which controlls 100% interest in PT Sarana Perkasa, 100% shares in PT Flora Sawita Chemindo, and PT Domas Agrointi Perkasam PT Domas Sawitinti Perdana.       

Bakrie & Northstar to manage investment

PT Bakrie & Brothers Tbk (BNBR) will partner Northstar Pacific to manage investment, especially to get institutional investors in a number of funds and private equities that company plans to set up.

In a public expose today, Bakrie & Brothers, a holding firm of Bakrie family, said the funds mostly will be used to finance Bakrie's sectors infrastructure, property, telecommunication, and plantation.

Bakrie has planned to participate in secondary market debt, including high yield bonds and distressed assets, and equity.

Key points of BNBR's public expose:

Bakrie's total debts is Rp6.9 trillion, consisting of medium secured notes of Rp5.21 trillion due in 2012, short term loan of Rp1.51 trillion, and repurchase agreement of Rp220 billion mature mid this month.

BNBR is planning to replace repo with bank financing.

The company is hammering out convertible bonds issue or equity linked notes of US$200 million-US$250 million in early 2010 to refinance and bankroll investments. Three potential debt arrangers Credit Suisse, Deutsche Bank, and Nomura Indonesia, are now selected

Further financing are needed due to Bakrie plans to subscribe subsidiaries' rights issue. PT Energi Mega Persada Tbk, oil and gas prucer, and PT Bakrie Sumatera Plantations Tbk.

Bakrie aims to jack up interest in PT Bumi Resources Tbk, the biggest coal miner, up to 20% next year. Now, Bakrie owns 18.6% of Bumi.

Bakrie restructures business strategy into three business parts, including 2 new such as cash generating activities and managed investments, and direct investments.

Pertamina to launch US$1 billion bond

PT Pertamina (Persero) is now hammering out a bond issue plan of US$1 billion-US$1.5 billion in the first semester 2010.

A source familiar to that matter said Pertamina, the biggest state-owned oil and gas producer in Indonesia, sent out a request for proposal (RFP), regarding to the bond issue, to 15 foreign investment banks on Wednesday last week.

"Pertamina has planned to issue a US$1 billion of minimum global bond next year, using its audited financial report this year," the source said.

Some famed foreign investment banks such as Bank of America-Merrill Lynch, BNP Paribas, Barclays Capital, CIMB Securities, Citi, Credit Suisse, HSBC Securities, JP Morgan, Nomura, Standard Chartered Bank, and UBS have received the invitation from Pertamina. They have to submit document, containing bond structure, to Pertamina and its lawyer Latham and Watkins LLP on 21 December 2009.          

Pertamina needs financing to fund its capital spending in 2010. The company's capital expenditure next year is estimated Rp39 trillion, allocating it to 70% for exploration and production at oil and gas field. The remaining will be used to prop up distribution business, including renovations to Pertamina gas stations and upsizing the storage volume in remote areas to prevent shortages.

Pertamina is estimated to experience a steep fall in net profit this year to Rp15.3 trillion from last year of Rp30.3 trillion as lower oil prices. The firm booked an unaudited net profit of Rp30.3 trillion last year, a sharp growth of 54.8% over 2007 on the bounce back of oil prices elevating.

Weird proposal

The source said some points in Pertamina's are so weird and seems unusual. "I think points A, C and D are unusual. Few foreign banks are familiar with Pertamina. Under those weird conditions, I am afraid that they will get the mandate easier," source said.

Point A of Pertamina's RFP:

Experience with the successfull completion of Rule 144A/Reg. S odderings and familiarity with oil and gas industry and Indonesia companies. In particular, Indonesia state companies.

Point C of Pertamina's RFP:

Familiarity with Pertamina, its operation and administration, preffered practices and considerations when structuring debt transactions.

Poin D of Pertamina's RFP:

Ability to liase successfully with Pertamina's legal counsels, other consultants as well as as other transaction parties

The source said why did Pertamina invite many foreign banks if the company has its own potential bond arrangers and underwriters? It would be useless for foreign banks which couldn't fulfill RFP's conditions.  If Pertamina wants to select arrangers fairly, remove those specific conditions. 
In July 2009, Pertamina secured syncicated loans worth US$400 million and Rp3 trillion from both foreign and local banks to bankroll upstream and downstream projects.
The dollar denominated loan involves 16 banks such as Citigroup (C.N) unit Citibank NA, Bank of Tokyo-Mitsubishi UFJ and Sumitono Mitsui Banking Corporation. Citigroup is lead arranger for the loan. The three years of loan paid 338 basis points above the London inter-bank offered rate (LIBOR)
Mandiri was lead arranger for the rupiah denominated loan and will lend Rp1.25 trillion , while Rp750 billion came from PT Bank Negara Indonesia Tbk, Rp500 billion rupiah from PT Bank Rakyat Indonesia Tbk, and Rp500 billion from PT Bank Central Asia Tbk.

MOF mandates Barcalys, Citi & Credit Suisse

Ministry of Finance (MOF) has mandated three stellar global investment banks, Barclays Capital, Citi Group, and Credit Suisse to help US$ denominated bond issue in Q1 next year.

Indonesia government is planning to unveil US$3 billion of global bond in February next year, while the other Islamic debt launch is scheduled in April 2010.

Adding to that, the government optimistic enables to sell up to US$11 billion of global bond next year, covering the state budget defisit of 1.6% of gross domestic product, equal to US$10.4 billion.

International rating agency Moody's upgraded a notch of Indonesia government debt rating to Ba2 from Ba3 on September 16. A month later, Standard & Poor's followed it by issung a better debt rating for Indonesia to BB- with positive outlook.

Bakrie seals Rp330 billion loan

PT Bakrie & Brothers Tbk (BNBR), a holding company of Bakrie family, has secured Rp330 billion of loan from PT Bank ICB Bumiputera Tbk. Loan agreement was signed between Bakrie and Bank Bumiputera yesterday.

Bakrie, a source close to the matter said, will use  proceed to refinance loan of PT Bank Internasional Indonesia Tbk, while the remaining will be a settlement cash for repurchase agreement (repo), maturing mid this month.

Bakrie has long term debt of Rp5.21 trillion due in 2012, short term loan (non repo) of Rp1.51 trillion, and repo of Rp220 billion. The company has planned to unveil convertible bond of US$200 million-US$250 million early next month.

Three potential arrangers, Credit Suisse, Deutsche Bank, and Nomura Indonesia, are now contending for the convertible bond mandate. "It seems Credit Suisse and Nomura will grab the mandate. But, let see what will be determined by Bakrie's management." 

PLN sets bond coupon 10.91%-12.97%

PT Perusahaan Listrik Negara (PLN) has set coupon of 7 and 10 years rupiah denominated bonds of Rp1.5 trillion in a range of 10.91%-12.97%.

Vice President Director PLN Rudiantara said of the total bonds, Rp500 billion is allocated for islamic bond with the same tenor and prices.

PLN, the state owned electricity company, will use the proceed to roll out transmission and distribution development of fast track 10,000 MW in 2009 and 2010. Bonds bookbuilding is scheduled on December, 10 to 17 December, while pricing will be devided on December, 21. The offering time is set on January 4 to 7 January.

Bonds listing at Indonesia Stock Market is scheduled on January, 13. Three lead underwriters Danareksa Sekuritas, Bahana Securities, and Mandiri Sekuritas have helped PLN's bonds issue. In October, PLN launched US$ denominated bonds.

CS, Deutsche, & Nomura fight for Bakrie CB

Credit Suisse (CS), Deutsche Bank, and Nomura Indonesia are contending to seize a convertible bonds (CB) or equity linked notes mandate worth US$200 million-US$250 million of PT Bakrie & Brothers Tbk (BNBR).

The investment banks have been short listed by BNBR to arrange the CB which will be unveiled early next year. "It seems Bakrie will pick two CB arrangers," a source close the deal said few days ago.

Of the three potential arrangers, Credit Suisse has wider chance to win the mandate as the bank is very close to Bakrie Group. Credit Suisse is the only investment bank which never leaves Bakrie Group.

When global financial crisis crippled Indonesia stock market, dragging down all Bakrie Group shares, Credit Suisse remained intact with PT Bumi Resources Tbk.

"Credit Suisse used to have majority exposure at Bumi [the darling coal producer for Bakrie Group]. But, the exposure had been refinanced by Bumi using high interest of China Investment Corporation [CIC] loan few months ago," the source said.

So, forget about Credit Suisse! I am sure Credit Suisse will mostly get the CB mandate. Who will be Credit Suisse partner? Deutsche Bank or Nomura?

According to BNBR's public expose handout, Bakrie & Brothers will use notes proceed to pay short term debts and prop up investment plan. The CB is available for cash settlement as well. The question is at what price Bakrie will convert the notes?

Brothers has long term debt of Rp5.21 trillion due in 2012, short term loan (non repurchase agreement/repo) of Rp1.51 trillion, and repo of Rp220 billion. The source said BNBR's repo will mature this month.

                     

BW Plantation profit to outstrip Rp200 billion?

PT BW Plantation Tbk (BWPT) is estimated to post 2009's net profit of surpassing Rp200 billion due to an increase of its performance until end of December this year.

A source familiar to the matter said BWPT, CPO producer which enrolled Indonesia stock market last month, has to book a mininum net profit of Rp49 billion in the last quarter this year.

The company's September profit was Rp151.61 billion, grew 2.57% from the same period last year, while revenue and operating profit respectively increased 8.48% and slightly downed 4.58% compared to end of September last year.

At the end of Q3 2009, BWPT made Rp449.97 billion of revenue and Rp217.88 billion of operating profit. Net profit margin in September this year slightly decreased from 35.63% to 33.67%. "Owing to performance this year, BWPT is hammering out to share dividend next year."      

        

BUMI to set price of non pre-emptive shares

PT Bumi Resources Tbk (BUMI) seems to decide itself how to measure price of new shares without pre-emptive rights due the Capital Market Supervisory Agency (Bapepam-LK) won't determine a price guidance.

By issuing a maximum 10% of new shares of BUMI's total capital paid in, 19.4 billion of shares, it may allow China Investment Corporation (CIC) to buy 10% or 1.94 billion of new shares. If BUMI comes with Rp2.500 for new shares, fresh cash of Rp4.85 trillion from CIC will come in. BUMI may use capital injection to pay its convertible bonds.
Bapepam-LK's Chairperson Fuad Rahmany, as quoted by Bisnis Indonesia today, said the regulator can't measure the price when publicly listed companies are planning to issue new shares without pre-emptive rights.

"We can determine [the price guidance] if market players has proposed it to Bapepam-LK. I hope we can launch a revised regulation of 10% new shares today," he said.

According to him, companies are allowed to determine price of new shares below market price. "Companies has an authority to calculate and decide price of new shares issue," Fuad said.

Regarding to the revised regulation, in my opinion, BUMI is allowed to set price of new shares issue below the market price. BUMI, the biggest coal miner controlled by Bakrie family, is now traded at Rp2,500 per share, slightly increased of 1,01% from closing price yesterday. The price is 12.9x of estimated price to earning ratio this year.

If BUMI sets the price below the market, it will disadvantage investors and the company itself. But, it may depend on negotiation between BUMI and CIC as well. "It will drag down BUMI shares as investors, who expect that BUMI may set a higher price for its new shares issue than the market level, will dump the shares," a source said.
Few days ago, BUMI secured US$150 million of loan from JPMorgan Chase Bank on December 2009. A source familiar to the matter said the proceed will be used by BUMI to back up PT Recapital Advisors to finance acquisition of 90% interest in PT Berau Coal, the fifth largest coal producer in Indonesia, via PT Bukit Mutiara, Recapital's wholy owned SPV.  

  

Medco Energi profit shrinks 95%

PT Medco Energi Internasional Tbk (MEDC) suffered net profit plunge of 94.81% at the end of September 2009 due to lower revenue. Medco didn't post an extraordinary gain of subsidiary disposal, while it booked US$261.59 million at the end of September last year.

Oil and gas producer which is controlled by Panigoro family posted September 2009's revenue of US$482.24 million, while it made US$1.05 billion during the same period last year. In result, MEDC's operating profit shrank by 88.41% from US$308.74 million to US$35.78 million at the end of third quarter this year.

A steep drop hit Medco's net profit of nearly 95% in the third quarter 2009 of US$15.18 million compared to the same period last year of US$292.61 million.

In October 2009, PT Mitra Energi Gas Sumatera, Medco Group, secured US$11.4 million of loan from PT Bank CIMB Niaga Tbk. Mitra Energi will utilizs loan proceeds, due in May 2013, to roll out gas pipe from Gunung Megang, 41 km from Muara Enim, Sumatra, to Singa, Karo, Sumatra.

PT Mitra Energi Batam, Medco Group, signed loan agreement of US$6.3 million due in October 2013 with PT Bank Central Asia Tbk in October 2009.                           

Rajawali meets snag on SMGR sale

PT Rajawali Corporation has offered 25.19% shares in PT Semen Gresik Tbk (SMGR) to investors at the open price of Rp6,800 per share, 5.88% discount from closing price yesterday of Rp7,200, during private placement deal.

During a market sounding, investors are interested to buy SMGR, Indonesian's state-owned cement maker, at the level of Rp6,100, 18.03% lower that the closing price yesterday.

"Rajawali has mandated Credit Suisse, while a local brokerage [PT Danareksa Sekuritas], a subsidiary of PT Danareksa (Persero) where Heru Adiningrat [former SMGR's director] had been appointed to be director, helps the share offer as well," a source familiar with the matter said.

Heru, who is now in charge for investment banking business, taking over from Danareksa Director's Aloysius Kiik Ro, used to be working for Semen Gresik. He was represented Rajawali's executives in the cement producer with the biggest market share in Indonesia. Rajawali is a holding firm of Indonesian tycoon Peter Sondakh.

      

BUMI-Recapital & Berau deal scheme

PT Bumi Resources Tbk (BUMI) Tbk, PT Recapital Advisors, PT Berau Coal's subsidiary, and Rizal Risjad are now striving to seek debts to close acquisition deal of 90% shares in Berau worth nearly US$1.5 billion (US$1.48 billion).

Berau Coal's deal is fully funded by combination of debts. The first source of debt coming from BUMI, the largest coal producer under Bakrie Group. BUMI has channeled subordinated loan of US$300 million to PT Bukit Mutiara, which is 99.6% controlled by Recapital to acquire Berau. BUMI just sold convertible bonds of US$300 million at the end of last month, bearing an annual interest rate of 5% and will due in the next 7 years.

Following BUMI's subordinated loan, Recapital has designated Credit Suisse, the darling creditor and investment bank for Bakrie Group, to arrange another debt facilities of US$600 million.

US$300 million of debt, so-called OpCo facility, will be sought by Empire Capital Resources Ptd Ltd, a wholy owned company of Berau Coal. The loan faciliy has been set to prop up early redemption plan of Berau's US$ dominated bonds. Berau has held a kicked off meeting with bond holders providing a buyback price of 104.68%.

The remaining facility arranged by Credit Suisse, dubbed HoldCo facility of US$300 million, will be expanded to Bukit Mutiara to finance shares purchase of 90% interest in Berau worth US$1.18 billion. Along with the HoldCo facility drawdown, a source familiar to the matter said, the purchase consideration will be bankrolled by BUMI's subordinated loan and payment notes of US$580 million sold to vendor which is Berau's share holders as well.     

Bukit Mutiara, Recapital's special purpose vehicle, will buy 100% shares in PT Risco which steers 90% of Berau Coal via PT Armadian (51%) and Rognar BV (Netherlands) (39%). Risco retains control Rognar BV indirectly via Winchester (Seychelles) (100%) and Aries (Malta) (100%), while Aries  owns 87.2% of Rognar BV.

Adding to that, Bukit Mutiara is planning to buy 100% shares in Regulus International (SG) and Maple (Labuan) which will set up a marketing agreement with Berau Coal.

In June 2009, Berau booked net sales of US$377 million and posted EBITDA of US$156.3 million. Berau's total debt outstanding was US$287.5 million at the same period, while cash and cash equivalent of US$156 million.

Here is structure of OpCo facility (US$300 million):
Borrower: Empire Capital
Guarantor: Berau Coal
Use of proceeds: Early redemption of Berau's bonds due 2011
Utilization date: December 28 2009
Maturity: 12 months after utilization date
Interest: 3 months US$ Libor + margin
Margin: 4.75% annualy for the first 2 quarterly payment, increasing by 1.50% per year
Security: All assets and receivables of both creditor and guarantor

Here is structure of HoldCo facility (US$300 million):
Borrower: Bukit Mutiara
Use of proceeds: partial payment of Berau purchase
Utilization date: December 28 2009
Maturity: 12 months after utilization date
Interest: 3 months US$Libor + margin
Margin: 8% per year for the first quarterly payment, increasing by 1.50% per year
Security: Shares in 90% of Berau Coal

Bakrie suffers profit margin drop

PT Bakrie & Brothers Tbk (BNBR) is suffering a steep drop in net profit margin in September 2009 due to a sinking net profit by 95.43%.

Based on BNBR's September financial report submitted to Indonesia Stock Exchange late afternoon today, holding company of Bakrie family posted net profit margin of 0.75%, a sharp tumble from a year earlier of 13.87%. Bakrie's September performance booked Rp40.49 billion of net profit, 95.43% steep below a year before of Rp885.74 billion.

BNBR's September revenue downed 16.59% from Rp6.39 trillion in September last year to Rp5.33 trillion, while operating income was slashed by 45.92% from Rp952.15 billion to Rp514.85 billion in September this year.

    

BUMI secures US$150 million loan from JPMorgan

PT Bumi Resources Tbk (BUMI) has sealed US$150 million of loan from JPMorgan Chase Bank, former creditor of repurchase agreement (repo) of BUMI's holding company PT Bakrie & Brothers Tbk (BNBR).

The loan agreement, due in 6 months, was signed by BUMI and JPMorgan as lender and facility agent on December 7 2009.

According to a public statement submitted by BUMI to Indonesia Stock Exchange late afternoon today, BUMI has not mentioned further detail of the loan structure.
BUMI, the biggest coal miner in Indonesia, has fully backed-up and bankrolled Indonesian investment bank PT Recapital Advisors which is now underway to acquire 90% shares in the fifth biggest coal producer nationally PT Berau Coal, curbed by Indonesian tycoon Rizal Risjad, worth nearly US$1.5 billion.

BUMI has channeled US$300 million of subordinated loan to Recapital's special purpose vehicle dubbed PT Bukit Mutiara. Adding to that, Recapital has mandated Credit Suisse to seek and arrange loan of US$600 million as well.

Berau has proved and probable reserves of coal estimated 317 million tonnes as of December 21 last year. In the first half 2009, Berau booked net sales of US$377 million and posted EBITDA of US$156.3 million. Berau total debt standing up to end of June 2009 was US$287.5 million, while cash and cash equivalent was around US$156 million.

Berau offers 104.68% for bonds buyback

PT Berau Coal, the fifth largest coal miner in Indonesia which is now being acquired by PT Recapital Advisors, backed-up by PT Bumi Resources Tbk (BUMI), has offered bond holders with buyback price at 104.68%.

According to some sources closed to the matter, Berau Coal, which has issued US$325 million of bonds due 2011, is helped by HSBC at the buyback program.

Around US$225 million of the bonds provide a fixed rate coupon of 9.375% due December 2011, while US$100 million of amortising floating rate due in December 2011 as well.

Recapital is underway to swallow 90% of Berau, which is curbed by Rizal Risjad, a son of Indonesian tycoon during former Presiden Soeharto era, worth nearly US$1.5 billion. Due to potential change control of Berau, it must offer bond holders with early redemption.

The source said buyout financing scheme is fully of debts combination. "I hear BUMI channeled US$300 million of loan to Recapital, while Credit Suisse is behind Recapital to make a pile of another US$300 million of debt."

Recapital owes Rizal of around US$538 million as well and the remaining, to prop up bonds buyback, will be fulfilled by Berau from the debt market. There is no shares swap at the transaction. Three investment banks Bank of America Merrill Lynch, Deutsche Bank, and PacBridge Capital advised Berau.

Indonesiantower-Telkom deal collapses

PT Telekomunikasi Indonesia Tbk (Telkom) scrapped acquisition deal of up to 80% shares of PT Solusindo Kreasi Pratama (Indonesiantower).

Referring to Telkom’s public statement to Indonesia Stock Exchange this evening, the biggest telephone operator in Indonesia said some conditions at the agreement could not be fulfilled.

Telkom, the state-owned telecommunication enterprise, via its subsidiary PT Dayamitra Telekomunikasi (Mitratel), announced signing of acquisition agreement with share holders of Indonesiantower on August 18 2009.

Fitch downgrades Pakuwon debts rating

International rating agency Fitch Ratings has downgraded long term foreign and local currency default ratings of Surabaya-based property company PT Pakuwon Jati Tbk (PWON) to RD from C, while national long term rating from C(idn) to RD(idn).

Fitch has reduced ratings of PWON's US$110 million of senior notes due in 2011 from C/RR4 to RD/RR4 and rupiah bonds of Rp38.5 billion due in 2011 from C(idn) to RD(idn).

The downgrades follow PWON's announcement of the completion of its debt exchange offer for 2011 notes. Under the exchange offer, 76.14% of noteholders that  validly tendered received 60% of the outstanding principal as cash upfront with the remaining 40% was exchanged into US$ step-up cash coupons and paid in kind interest unsecured senior notes due in 2015).

10% Secondary offering benefits BUMI

Indonesia Capital Market Supervisory Agency (Bapepam-LK) will  unveil revised regulation of capital injection without pre-emptive rights (secondary offering) up to 10% of the paid capital next week, which benefits PT Bumi Resources Tbk (BUMI).

Revised of Bapepam's regulation No.IX.D.4 has softened previous regulation which allows public companies to issue new shares without pre-emptive rights of maximally 5%.

BTN sets IPO price of Rp800/share

PT Bank Tabungan Negara Tbk (BTN), the state-owned mortgage bank, set an initial public offering price of Rp800 per share, in the middle of the range Rp750-Rp1,100.

The bank has decided to make a pile of Rp1.88 trillion from the IPO of 2.36 billion B series shares or 27.1%, including employee stock option plan of 4%.

PT CIMB Securities Indonesia and PT Mandiri Sekuritas are lead underwriters for BTN's IPO. But, no one of the underwriters could be reached to confirm about the IPO price.

After completing its IPO, BTN will unveil Rp1.5 trilion of IDR denominated bonds and asset back securities valuedRp1 trillion next year. "It seems IPO BTN is not too hot," a trader said.

BUMI bankrolls Recapital

PT Bumi Resources Tbk (BUMI) has finally bankrolled PT Recapital Advisors with fresh money of US$300 million to finance a leverage buyout of the fifth biggest coal miner in Indonesia PT Berau Coal. Rizal Risjad and Recapital  reached an acquisition agreement of the fifth biggest coal producer in Indonesia PT Berau Coal valued nearly US$1.5 billion for 90% of shares. But, financing scheme is on the way. Still, Berau needs to tap new bridging loan into the market. How does Recapital prop up the financing?

Sumalindo transfers SHJ shares to TKIM

u                           Shares transfer of PT Sumalindo Hutani Jaya (SHJ), a subsidiary of PT Sumalindo Lestari Jaya Tbk, a forestry company, to paper and pulp producer PT Pabrik Kertas Tjiwi Kimia Tbk (TKIM) had been effective on November 26 2009.

In coincidence with the shares transfer, Sumalindo Lestari brought its receivables in SHJ to a special purpose company Marshall Enterprise Ltd.

According to a public announcement submitted by Sumalindo Lestari Jaya today, the company transferred receivables of Rp17.9 billion to Marshall Enterprise.

The sale and purchase agreement of SHJ was agreed by extraordinary general meetings of Sumalindo Lestari on October 15 2009.