Samko Timber pays US$21 mio debt

Samko Timber Limited, a parent company of PT Sumalindo Lestari Jaya Tbk (SULI), seized US$28.42 million in cash from rights issue.

According to Samko's formal announcement, the company has used US$21 million from the proceed to pay outstanding loan. Samko will announce further announcement in relation to use of remaining of rights issue proceeds.

Samko Timber own and control 00.98% stakes at PT Sumber Graha Sejahtera which manages 51.95% ownership in Sumalindo Jaya Lestari.

Sumber Graha also controls five sub holding companies PT Makmur Alam Lestari (99.93%), PT Panca Usaha Palopo Ply Wood (98.46%), PT Putra Sumber Utama Timber (99.2%), PT Sejahtera Usaha Bersama (99.34%), and PT Sumber Graha Sejahtera Indonesia (99%). 

Samko Timber is a leading timber processing company in Indonesia. With over 1 million m³ of processing capacity, it is among the top five tropical hardwood plywood producers globally, and one of the largest in Indonesia. 

According to an independent industry research firm, Poyry Forest Industry, Samko has an estimated market share of approximately 32% in the domestic processed timber market in 2006.

The company's manufacturing facilities, plywood, veneer, MDF and secondary processing mills, are spread across the islands of Java, Sumatra, Kalimantan and Sulawesi, and are strategically located near to wood sources. Main products are plywood, and veneer which is raw material for plywood, LVL and MDF panels, and several secondary, value added plywood products.

Fidelity & Pheim eager to buy PP

Two famed fund management firms Fidelity Asset Management and Pheim Asset Management are interested to buy shares of state-owned contractor PT Pembangunan Perumahan (PP) during its initial public offering (IPO).

Speaking in a press statement today, Head of Investment Banking PT Mandiri Sekuritas Iman Rachman said total demand for PP reaches Rp900 billion, 1.7 folds from its size of 1.04 billion shares at Rp560 per share.      

Mandiri Sekuritas is one IPO underwriter in collaboration with PT Danareksa Sekuritas and PT DBS Vickers Securities Indonesia. In an underwriting agreement, Mandiri has committed to underwrite 38.92% shares or 404.34 million shares worth Rp226.43 billion which is the largest portion compared to other underwriters.

Danareksa will take 380.59 million shares or 36.63% worth Rp213.13 billion, while DBS has committed to underwrite 207.79 million shares or 20% worth Rp116.36 billion.

Iman explained PT Jamsostek (Persero), one of largest market player in Indonesia stock market, has also committed to buy PP. Offering is scheduled on February 1-3 and listing will be on February 9.

ANTM 2009 sales plunges 10%

Sales during January-December last year of state-owned nickel producer PT Aneka Tambang Tbk (ANTM) plummeted 10% compared to previous year due to drop in sales volume as well as nickel prices. 

The company posted Rp8.65 trillion in sales last year. It produced 12,550 tons nickel in feronickel (TNi) in 2009, outpacing its internal production volume target of 12,000 TNi. But, production volume realization last year plunged 29% last year compared to the previous year level.

During fourth quarter last year, ANTM produced 3,873 TNi, up 9% from the same period in 2008, due to operational of feronickel plant III.

Gold production volume in 2009 reached 2,626 kg, 7% drop compared to previous year, in line with lowering production.

The company has anticipated decrease of nickel sales volume since end of 2008. Adding to that, it has lowered sales and production volume target in 2009. 

According to ANTM's September financial performance, it posted Rp6.27 trillion in net sales, slightly lower than the same period in 2008 of Rp7.58 trillion.

Operating profit suffered a steep plunge from September 2008 of Rp2.05 trillion to the same period last year of Rp337.23 billion due to soaring cost of goods sold.

ANTM's September 2009 bottom line experienced a sharp drop from Rp1.62 trillion or Rp170.30 per share in September 2008 to Rp292.66 billion or Rp30.69 per share.

 

Local market is the first

Golden Agri-Resources Ltd (GAR), the world's second largest crude palm oil plantation producer that is controlled by Widjaja family, keeps continue to expand. GAR, Singapore Exchage-listed company, seeks an opportunity to acquire plantations and developing downstream products.
During a busy day in the side lines of Feed The World Seminar held at Jakarta Convention Centre, Jakarta, yesterday, Insider Stories had a chance to interview Franky Oesman Widjaja, Chairman and Chief Executive Officer of Golden-Agri Resources Ltd.          
Insider: What is the plan of GAR to expand business? Is it any acquisition target this year?
Franky: We only take a look an open opportunity. If we enabled to expand our planted area, we would do it. But, we closely watch other plantations which is not managed very well by the owner. GAR is looking for every chance to enhance our plantation.
Insider: How much capital expenditure (capex) does GAR need this year?
Franky: We will allocate capex in line with GAR's cash flow. I think it is flexible with economic condition. I hope everything this year will be running well. As usual, we are hammering out combination of internally cash flow by 30% and debt will be the remaining. GAR Group capex is estimated US$300 million.
Insider: Is it for acquisition?
Franky: The group will use capex to develop plantation area and downstream products such as foods, oleochemical, and biofuel. For sure, we are firstly focusing how to fulfill deman in the local market.
Insider: How do you develop oleochemical products?
Franky: We will enlarge our business through our subsidiary Socimas. Each year we can produce around 100.000 tons. We nowadays strive to jack up the capacity to 500.000 tons annually. I hope we can do it in 2010.
Insider: How much is CPO production target this year?
Franky: GAR Group is expected to produce more than 2 million tons CPO from last year of nearly 2 million tons. We set 10%-15% increase in annual production target     
Additional information about GAR's September 09 performance:
GAR posted US$1.65 billion in revenue at the end of September last year, 31% drop from a year before of US$2.39 billion. But revenue grew 19% in quarter to quarter, from second quarter last year of US$566 million to the third quarter of US$673 million.
GAR's EBITDA plunged 51% from US$559 million at the end of September 2008 to US$272 million at the same period last year. The company's September 09 net profit tumbled 63% from US$365 million during January to September 2008 to US$134 million.
 This was mainly attributable to weaker average selling prices for GAR’s palm products in year to date (YTD) September 2009 as compared to high-price period last year. The average CPO market price (FOB Belawan) was US$615 per tons in YTD September 2009 against US$1,018 per tons in YTD September 2008.
Focusing on its expansion plan, the Group accomplished new planting of approximately 14,400 hectares during YTD September 2009 and grew its total planted area to a total of 406,000 hectares as at 30 September 2009, the largest in Indonesia. Mature area increased by approximately 25,200 hectares, reaching total mature area of 334,000 hectares.

GAR operates a total planted area of 406,000 hectares as well as 33 palm processing mills, three refineries, and six kernel crushing plants in Indonesia. It also operates in China through as integrated deep sea port, storage, oilseed crushing facilities, and refinery facilities in Ningbo and Zhuhai.

 

Metropolitan profit soars 12.44%

PT Metropolitan Kentjana Tbk (MKPI) posted a soaring net profit of 12.44% during January to December last year compared a year before.

The operator of Pondon Indah Mall booked 2009 net profit of Rp239.37 billion from a year before of Rp212.89 billion. EPS grew from Rp249.52 to Rp252.45 per share. 

The company's 2009 revenue slightly increased 9.85% last year from Rp604.41 billion in 2008 to Rp663.93 billion, while its operating profit jumped 16.78% from Rp277.04 billion in 2008 to Rp323.53 billion last year.

It suffered a foreign exchange loss of Rp6.24 billion last year from a year before of forex gain of Rp16.77 billion.

The company is controlled by PT Karuna Paramita Propertindo of 42.77%, public investors own 10.02%, and PT Apratima Sejahtera, PT Buditama Nirwana, PT Dwitunggal Permata, PT Putra Berlian Kencana, and PT Penta Cosmopolitan own 7.09% respectively.

 

PP IPO & undewritings size

A prolonged talks in deciding final price of state-owned contractor PT Pembangunan Perumahan (PP)'s initial public offering (IPO) with three lead underwriters has eventually ended. PP IPO price is determined at Rp560 per share, sending Rp581.83 billion in fresh cash to the company.

According to additional offering circular published today, PP is underway to offload 1.04 billion shares or 21.46% at a nominal Rp100 per share.The lead underwriters, PT Mandiri Sekuritas, PT Danareksa Sekuritas, and PT DBS Vickers Securirities Indonesia take 992.73 million shares or 95.55% worth Rp555.93 billion, while the remaining goes to syndicated underwritters of 46.25 billion shares or 4.45% worth Rp25.90 billion.

Who is the largest underwriter? Mandiri Sekuritas ranks top with a total commitment to absorb 404.34 million shares or 38.92% worth Rp226.43 billion, followed by Danareksa Sekuritas and DBS with total commitment of Rp213.13 billion and Rp116.36 billion respectively.

According to a source, PP vendors demand reach Rp200 billion-Rp300 billion, more than half of PP IPO target of Rp581.28 billion. "Vendors are willing to buy PP initial shares, while retail investors are demanding lower price," a source said.

PP is planning to offload 21.46% of shares during IPO at Rp560 per share, close to the lowest level of IPO price range of Rp530-Rp900 per share.

It seems PP needs more supports from its vendors to obtain IPO target due retail investors know that the initial price is not as cheap as its peers.

Based on PT Mandiri Sekuritas estimation, IPO underwriter, PP is calculated to book Rp254 billion in net profit this year and Rp309 billion next year. The company's 2009 revenue to reach Rp6.26 trillion.

Finally CP Prima downgraded to default

Global rating agency Fitch Ratings yesterday downgraded PT Central Proteinaprima Tbk (CP Prima) long-term foreign currency Issuer Default Rating (IDR) to restricted default (RD) from C.
RD ratings indicate that an issuer has experienced an uncured payment default on a material financial obligation but has otherwise not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedures.

Fitch on January 7 2010 also slashed CP Prima long-term foreign currency issuer default rating to C from CC after its failure to pay semi-annual coupon of US$325 million notes. Adding to that, the rating agency dragged down the rating notes due 2012 issued by Blue Ocean Resources Pte Ltd (Blue Ocean) and guaranteed by CPRO and its subsidiaries, to C from CC. The ratings remain on rating watch negative (RWN). The recovery rating of the USD Notes is RR4.

The rating agency yesterday also affirmed the C' rating of the US$325 million senior unsecured notes due in 2012, issued by Blue Ocean and guaranteed by CP Prima and its subsidiaries, reflecting a recovery rating of RR4. The ratings have been removed from Rating Watch Negative.
The rating actions follow CP Prima failure to pay the US$17.875 million semi-annual coupon on the notes on 27 January 2010, when a 30-day grace period for the coupon payment ended. The company continues to face tight liquidity primarily on the back of a virus contamination in its shrimp ponds.
CP Prima is currently in the process of executing a 6 months standstill agreement with the noteholders. CP Prima IDR will be upgraded to C once the standstill agreement becomes effective.
CP Prima and bond holders agree not to speed up the maturity of outstanding bonds worth US$325 million n the standstill period in the next 6 months.

Benakat 'hot' initial public offering

Underwriter and management of PT Benakat Petroleum Energy Tbk are claiming that hot demand from investors beset its initial public offering (IPO).

Initial offering indicates that Benakat IPO has secured 5.13 folds oversubscribed, which in return making oil and gas exploration producer jacks up target IPO proceed from Rp1.38 trillion to Rp1.6 trillion. 

Benakat Energy President Director Arifin Wiguna said the company's IPO experiences oversubscribed, most of them coming from overseas investors.

Steffen Fang, PT Danatama Makmur Vice President of Investment Bank, said demand from foreign investors could reach 90% which 80% of it is coming from institutions. Benakat determined its IPO price at Rp140 per share, the upest level of price range. Adding to that, the company also issues warrants at the level of Rp145.

According to the company, a combination of shares and warrants in return to provide Benakat with a fresh cash of Rp2.6 trillion. The company will grab Rp1.6 trillion from selling 11.5 billion of shares or 38.2% and Rp942.5 billion from 6.5 billion of warrants issue. 

Benakat Petroleum is in joint operating cooperation with PT Pertamina-EP to develop Benakat Barat Block in Prabumulih, South Sumatra.Benakat Petroelum is an integrated energy sources services in Indonesia with scope of works covering oil and gas, coal, and engineering, procurement, and construction for energy facilities. Controlling share holders of Benakat Petroleum is PT Indo Tambang of 89% and PT Inti Permata Nusantara of 12%.

MIRA must pay US$1.45 mio debt in May

PT Mitra Rajasa Tbk (MIRA), holding company of PT Apexindo Pratama Duta Tbk (APEX), needs to pay US$1.45 million of debt due on May 9 2010 to prevent loosing of 10% stakes at Singapore-based company Sabre System International Pte Ltd (SSI). 

According to Mitra Rajasa's September financial report, the company owns 93.35% stakes at SSI, a company providing services of offshore production facility.

MIRA had signed a loan agreement worth US$38.54 million with Heronswood Assets Management Ltd in September 2008. Mitra Rajasa used the proceed, which is charging an annual interest rate of Libor+2.5%, as part of financing for Apexindo.

On December 9 2008, MIRA and Heronswood agreed to restructure short term loan into noninterest debt with 17 months maturity since December 9 2008. In result, MIRA must fulfill a monthly payment of US$1 million from the first month  to 16th month and US$1.45 million for 17th month. If MIRA fails to fulfill the installments at the end of period, Heronswood will seize 10% stakes at SSI.      

Referring to cash and cash equivalent of the company,  MIRA should be able to pay the debt, given its September 2009's cash position of Rp798.91 billion, a steep drop from a year before of Rp1.69 trillion.

Morgan Stanley & Co Int. Plc controls 19.17% and PT Intikencana Pranajati owns 13.60% stakes at Mitra Rajasa.

Kalbe net sales reaches Rp9 trillion

PT Kalbe Farma Tbk (KLBF) posted Rp9 trillion in net sales last year, 14.3% increase from a year before.

One of Indonesia largest pharmaceutical producer booked 31.3% growth in 2009 operating profit to Rp1.5 trillion from a year before.

Adding to that, the company's 2009 net profit rose 31.7% to Rp930 billion compared to the same period in 2008. During January to December 2009, Kalbe Farma was in net cash position of Rp1.25 trillion.

Kalbe said  it may spend up to Rp 500 billion (US$53 million) on acquisitions  this year to accelerate growth, a move analysts said they would support.

“We’re widening our search for companies or products to be added to our current portfolios,” said Vidjongtius, Kalbe Director, adding that Kalbe has its eye on as many as five firms, but may only buy one or two next year, as reported by Jakarta Globe on November 13 2009.

“We could acquire more, but it would be much riskier, and would be more difficult to integrate quickly,” he said. Vidjongtius also said the company would seek to buy over-the-counter products or health foods that could immediately boost revenue.

Naya Tirambintang, an analyst at state-owned brokerage firm PT Danareksa Sekuritas, said Kalbe, the country’s largest private pharmaceutical company, could very well afford to buy companies or products.

“They still have enough cash and their gearing [loan] ratio is still low, so they could take out a loan if they have to,” she said

She noted that Kalbe’s 2010 growth will be in the low double digits if it relied on existing products — in line with the industry’s projected growth rate of 10 percent to 15 percent.

Vidjongtius said Kalbe may also allocate Rp 300 billion to Rp 500 billion of internal cash flow for capital expenditures, including Rp 100 billion on its distribution unit, PT Enseval Putera Megatrading.

Suryainti proposes 40% debt haircut

A wounded Surabaya-based property developer PT Suryainti Permata Tbk (SIIP) has proposed a 40% debt haircut to its creditors in a bid to resolve the problem.

Adding to that, the company has also submitted an interest relief as well as debt restructuring. Suryainti explained that it has refused to pledge more assets to creditors.

Restructuring Committee had been in a meeting with notes holders. During the meeting, the company proposed the restructuring scheme.

"After the meeting, we haven't obtained any further notices about our restructuring structure until getting a notice of default on January 19 2010," said Suryainti President Director Henry J. Gunawan in a public statement to Indonesia Stock Exchange today.    

Suryainti failed to pay interest of US$5.03 million to Amsterdam-based creditor Oversign BV. The company should pay such interest scheduled on January 18. But, as of two days after the schedule, the property firm remains unable to pay the interest. A default story is not weird for Suryainti. Few years ago, the company was also in default level after failing to pay debts.

Following to the current default, Suryainti must pay 2% additional cost of its annual interest of 14.23% to Oversign.
Speaking in public announcement to Indonesia Stock Exchange yesterday, Suryainti Corporate Secretary Arief Sutjahyo said the company is now underway to restructure its debts with creditors.
SIIP obtained loan facility of US$70.71 million from Oversign on July 13 2007 with maturity on July 20 2011. Suryainti used the facility to underpin property projects, while it gave assets such as 2.85 million m2 of lands. 

The creditor has charged an annual interest of 14.23% on its loan facility to Suryainti Permata. Adding to that, the property firm must obey interest payment schedule twice a year on July 20 and January 20.      

Mitra Rajasa in net loss Rp641.05 bio

PT Mitra Rajasa Tbk (MIRA) suffered a net loss of Rp641.05 billion at the end of September last year, dropped 1,099.22% from a year before of net profit of Rp64.15 billion.

The company's bottom line was dragged down by ballooning other charges to Rp1.09 trillion during January-September 2009 from a year before of Rp67.05 billion. 

MIRA, that acquired drilling company PT Apexindo Pratama Duta Tbk (APEX) last year from PT Medco Energi Internasional Tbk (MEDC), posted a steep jump in revenue by 347.84% from Rp453.18 billion in September 2008 to Rp2.03 trillion last year. Operating profit rose 241.79% from Rp145.94 billion in September 2008 to Rp498.81 billion last year.

At the end of September last year, MIRA was burdened by bonds interest of Rp189.52 billion, interest and bank fine of Rp691.99 billion, and foreign exchange loss of Rp119.52 billion.

Morgan Stanley & Co International Plc owns 19.17% stakes at MIRA, PT Intikencana Pranajati controls 13.60%, PT Mitramumi Expressindo has 7.36%, and PT E-Capital Securities owns 5.52%.

   

Indosat's 2009 subscribers 33.1 mio

PT Indosat Tbk (ISAT), GSM-based operator that is controlled by Qatar Telecom, posted 2009 total subscribers of 33.1 million, beating PT XL Axiata Tbk (EXCL)'s numbers of 31.4 million.

Speaking after an extraordinary general meeting today, Indosat's President Director Harry Sasongko Tirtojondro said the company is also planning to refinance debt maturity of Rp4.5 trillion this year.

"We currently review all options [financing]. We will go into the market when the market is the best for us," he said.

Indosat has invited around nine investment banks such as Barclays, Citi, Credit Suisse, Deutsche, JP Morgan, RBS, and Standard Chartered Bank to submit an optimum strategy of financing in relation with bonds issue.   

As of December last year, Indosat posted 4.4 million of additional subscribers to 33.1 million, while XL booked 4.8 million additional subscribers in 31.4 million.

ISAT is internally in frenzy discussions  with foreign investment banks. Indosat is digging out more advanced advices to confront fiercest rival XL, cellular arm of Axiata Group Berhad, previously named Telecom Malaysia.
After rolling out a beauty contest to pick out financial advisors to review its tower business, Indosat is now coming with dollar denominated bonds issue worth Rp7 trillion to roar its cellular penetration  deeper. The operator is considering to seek financing to support capital expenditure and refinance matured bonds in October and November this year.
"Massive expansion is a must for Indosat, or it will be left behind by XL, which is led by Indosat former Director Hasnul Suhaimi. Indosat gets dizzy to determine a terrific strategy to beat XL," a source said.

According to a research report published by PT Danareksa Sekuritas, the operator needs US$600 million-US$700 million of capital expenditure this year, similar with last year capex.XL's capex this year was expected to reach US$400 million-US$450 million.

Laszlo Imre Barta replaces Kaizad

Laszlo Imre Barta just now had been appointed by extraordinary share holder general meeting of PT Indosat Tbk (ISAT) as new Director, replacing Vice President Director Kaizad B. Heerjee.

Adding to that, a special staff of Ministry of State-Owned Enterprise Alexander Rusli, husband of former banker Credit Suisse and UBS Meliza Musa, was also designated to be a new commissioner in Indosat.

Alex used to special staff of former Minister of State Owned Sofyan Djalil. Alex is also a husband of former Credit Suisse Banker Meliza Musa which is now working for PT Ancora Indonesia Resources Tbk as Finance Director.
Responding to Indosat's upcoming new management structure, Indosat stocks has soared 18.46% during three consecutive trading days to Rp5,800 per share. 

Indosat is now run by five directors. Harry Sasongko Tirtojondro, Indosat President Director, started  his new job on August 11 2009, replacing Johnny Swandi Sjam.
Harry Sasongko Tirtojondro is stayed in his position as Indosat President Director. He is working with his teams, Kaizad B. Heerjee, since June 2009, Fadzri Santosa, Director and Chief Wholesale and Infrastructure, since June last year, Peter Kuncewicz, Director of Finance, since September 2009, and Steve Hobbs as Indosat Director since June 11 2009.

Together with board of directors, 10 commissioners have also working for Indosat. President Commissioner is held by H.E. Sheikh Abdullah Bin Mohammed Bin Saud Al Thani and the remaining are Setyanto P. Santosa, Rachmat Gobel, Richard F. Seney, Michael Latimer, Soeprapto, George Thea Peng Heok, Rionald Silaban, and Jarman.

Bakrie Telecom to sell US$300 mio bond

PT Bakrie Telecom Tbk (BTEL) is underway to unveil US$200 million-US$300 million of bond to refinance its debts.

Speaking to Insider Stories today, BTEL, subsidiary of Bakrie Group, President Director Anindya Bakrie said the company has a total debt of US$200 million.

"We are underway to get ratings from international rating agency. If we think that the market is favorable for the new issue, we will be in the market soon," he said today at Jakarta Convention Center this morning.

According to him, BTEL, CDMA-based operator with Esia brand, has set target of 14 million subscribers, while capital expenditure will be allocated of US$200 million.

In September last year, Bakrie Telecom posted Rp2.54 trillion in net profit, grew from a year before of Rp1.99 trillion. But, operating profit downed from Rp270.13 billion to Rp223.02 billion in September last year due to ballooning operating expenses.

In return, the operator's net profit dropped to Rp97.33 billion from September 2008's position of Rp121.25 billion. As of September last year, long term debt recorded Rp1.31 trillion from a  year before Rp1.36 trillion.     

BUMI, CIC, and clarification letter

PT Bumi Resources Tbk (BUMI) yesterday came out with a clarification press release, which is a rare action, to diminish tons of market rumor.

Two days ago, a market rumor via BlackBerry messenger saying that Bumi, Indonesia largest coal mining producer, would submit non-preemptive rights to the Capital Market Supervisory Agency, was fastly mushrooming.

A funny thing is the rumor also mentioned exercise price of non-preemptive rights at Rp2,925 per share. Someone put in the rumor into Obrolan Bandar mailing list as well.

The day after the rumor spreading, a morning notes came out saying Bumi, quoting its Investor Relations Dileep Srivastava, at this point of time has no intention to issue new shares (non-preemptive rights), countering a market rumor yesterday that non-preemptive rights would be exercised at Rp2,925 per share.
What is going on with Bumi? Everyone in the market questions about it.

I think to make a clearer situation, please refer to what Dileep Srivastava explained in a public statement to Indonesia Stock Exchange (IDX) dated on January 8 2010. Please take a look No.3 explanation.

Here is question and answer between IDX and BUMI:

IDX: In relation to Bisnis Indonesia's article published on December 28 2009 saying that BUMI and CIC are in talks for possible debt conversion...Bumi considers to issue 10% of new shares or 1.94 billion shares?

BUMI: The company is planning to issue new shares without preemptive rights in line with Bapepam regulation No. IX D.4...

IDX: Some loans from CIC to be converted into Bumi new shares?

BUMI: Net proceeds from the issue will be used to pay the company's debts.

IDX: To issue new shares, Bumi has appointed Danatama Makmur as a financial advisor?

BUMI: Danatama Makmur is one of BUMI's financial advisors in various financing activities. 

IDX: Please explain about technical preparation and time target?

BUMI: Up to now, Bumi is in negotiations with some strategic investors.

In the public statement, Bumi never answered about CIC and other names of strategic investors. But, it also didn't deny about CIC. After announcing the statement, Bumi until now hasn't come with new statement regarding to non-preemptive rights. I think what Bumi explained to IDX in such statement was a formal. What do you think about it?

Matahari ready to redeem bonds

Retailer arm under Lippo Group that is controlled by Riady family, PT Matahari Putra Prima Tbk (MPPA), is in Rp3.7 trillion net cash position. Early redeemption of US$200 million bonds will be the next step to strengthen its capital structure.

Matahari President Director Benjamin J. Mailool said the company has adequate cash to do early dollar denominated bonds buybacks. "If the proposed transaction were agreed, we would like to strengthen our financial structure," he said as reported by Bisnis Indonesia today. 

According to Moody's Investors Service senior analyst Ken Chan, the sale proposed of Matahari Putra's subsidiary PT Matahari Department Store Tbk (MDS) to CVC Capital Partners will have a negative impact for business risk and MPPA operational. In return, Moody's argued that Matahari Putra may do bonds early redemption.

Post MDS sale agreement will jitter credit profile for Matahari Putra, which is in result unable to prop up B1 rating.

Benjamin said the company has anticipated ratings downgrade from global rating agency. But, a strategic alliance with CVC will be a bode well to jack up company's ratings.

Moody's Investors Service has placed PT Matahari Putra Prima Tbk's (MPPA) B1 corporate family and senior unsecured bond ratings on review for possible downgrade.

Rudiantara is back for Indosat?

A market rumor saying Former Vice President of PT Perusahaan Listrik Negara Rudiantara to be appointed for PT Indosat's board of directors keeps going strong.

According to a source familiar with the matter, Rudiantara was in talks with Indosat's controlling share holder Qatar Telecom in Singapore two weeks ago before extraordinary general meeting (EGM) tomorrow. The speculation successfuly elevated Indosat stocks in the market.

But, both Rudiantara and one of Indosat commissioner denied the speculation saying that Rudiantara was not in position for vice president, replacing predecessor Kaizad B. Heerjee.

"A day before EGM, some people close to the matter said Rudiantara is one of strong candidate to fill in Indosat vice president director," a source said.

The problem is Harry Sasongko Tirtotjondro was designated by share holders to be Indosat's president director five months ago.

A frenzy talks have been mushrooming in Indosat to find the best strategy in confronting its fiercest contender PT XL Axiata Tbk (EXCL) that is now led by Indosat former Director Hasnul Suhaemi. 

Indosat (ISAT) is estimated to keep retaining the second largest cellular operator in Indonesia after posting 32.7 million subscribers in 2009, slightly higher than its fiercest competitor XL Axiata which is predicted to grab 32.4 million subscribers.  

In a research report published by Macquarie Equity Research in January 21, Indosat is focusing on maintaining No.2 status on all key parameters. Management commentary suggests ISAT is clearly focused on maintaining its second largest position, which suspected will provide a competitive undercurrent throughout FY10 as XL Axiata looks to capitalise on ISAT’s internal restructuring.

Industry feedback suggests ISAT may post 4 million net adds subscribers in fourth quarter last year, totalling 32.7 million subscribers, while XL posted 5.8 million net adds, totalling 32.4 million, resulting in ISAT maintaining its No.2 market share.

   

   

Metrodata sells EMC to BT Frontline

PT Metrodata Electronics Tbk (MTDL) determined to dispose stakes at PT E Metrodata Com (EMC) to BT Frontline Pte Ltd on January 26 2010.

In a public statement to Indonesia Stock Exchange, EMC is a joint venture company founded by three parties Metrodata, Sun Microsystem, and BT Frontline on January 3 2007.

Under the joint venture agreement, Metrodata has informed BT Frontline that it will exercise a put option on EMC.    

CIMB & Stanchart help CVC to raise loan

CIMB Securities and Standard Chartered Bank are arranging CVC Capital Partners to raise Rp3.3 trillion of loan as payment part scheme to buy 90.76% stakes in PT Matahari Department Store Tbk (MDS).

CVC Capital, one of largest private equity firm globally, has agreed with PT Matahari Putra Prima Tbk (MPPA) to settle 90.76% acquisition of MDS with combination of cash, shares and warrants issue, and vendor loan.

MPPA and CVC on January 23 2010 signed sale and purchase agreement of 90.76% or 2.65 billion shares at MDS worth Rp7.17 trillion or Rp2,705.33 per share.
CVC, that acquires MDS via Meadow Asia Company Limited (MAC), will control 80% stakes at MAC and the remaining goes to MPPA. In return, CVC will effectively own 72.16% stakes at MDS.
The private equity, headquartered in Luxembourg, Europe, will pay MDS deal with cash, shares and warrants that will be issued by MAC, and loan from MAC or its subsidiaries, to MPPA.          
According to an analyst from a local brokerage, MPPA, which is controlled by Riady family through AcrossAsia Limited Hong Kong and PT Multipolar Tbk, will obtain at least Rp3 trillion of net cash from the deal, given MPPA has net debt of Rp1.3 trillion.
"What is next strategy of MPPA with cash rich position?," he said. He said CVC, owner of Debenhams, should do something on it. In Indonesia, Debenhams license is owned by PT Mitra Adiperkasa Tbk.
If CVC withdraws or not to extend the license and give it to MDS, it would be additional value for MDS and MPPA indirectly. 
"We are very positive on Indonesia and looking forward to the continued development of MDS as leading retail player in the country and partnership with Lippo Group," Sigit Prasetya, CVC Asia (Singapore)'s partner, Sigit Prasetya told Insider Stories.

CVC funds nowadays own 52 companies worldwide employing approximately 285,000 people in numerous countries. Together these companies have combined annual sales of €88 billion.  

CP Prima in 6 month debt standstill

PT Central Proteinaprima Tbk (CP Prima) and bond holders has reach a standstill agreement in 6 months, while debt restructuring is underway.

CP Prima Director Gunawan Taslim, in a public announcement to Indonesia Stock Exchange, said during the standstill, bond holders are unable to ask early redemption of US$325 million bonds issued by CP Prima's wholy owned subsidiary Blue Ocean Resources Pte Ltd. Under the agreement, bond holders are not allowed to execute bonds collaterals. Creditors are forbiden to submit a bankcrupcy on Blue Ocean or CP Prima.

Before reaching standstill agreement with its bonds holders, CP Prima still has 30 days a remedial period to pay coupon worth US$17.87 million.

CP Prima failed to pay coupon on December 28 2009 due to worsening its performance after suffering from virus contamination on its ponds. The virus has been difficult to contain and is spreading across its farms. As such, a significant improvement in shrimp production is not expected in the near-term, which will result in further haemorrhaging of cash and weakening of its liquidity position.

Furthermore, CP Prima had limited cash balances of around US$21 million at end-September 2009. Its liquidity is further hampered by difficulties it faced when renewing bank working capital facilities.

In June 28, 2007, Blue Ocean issued US$325 million guaranteed senior secured notes due 2012. The notes are guaranteed by CP Prima and certain of its existing subsidiaries (as subsidiary guarantors) such as  PT Centralwindu Sejati (CWS), 99% owned by CP Prima, PT Central Pertiwi Bahari (CPB) (99%), PT Marindolab Pratama (MLP) (100%), and PT Central Panganpertiwi (CPgP) (99%).

CP Prima and PT Bank Negara Indonesia Tbk (BBNI) agreed to defer L/C maturity from September 20 2009 to June 22 2010.             

Adhi eyes rights issue above Rp800

State-owned contractor PT Adhi Karya Tbk (ADHI) is reviving a rights issue program  with an exercise price of above Rp800 per share.

Adhi Karya Finance Director Indradjaja Manopol said the company is expected to issue 30% of new shares with the ratio of three old shares to get rights to buy one new share. The corporate action will be scheduled in fourth quarter this year.

In recent years, Adhi planned to do such rights issue. But, it failed to seal 'green light' from the government due to state budget deficit.

According to Manopol, the company will use proceeds from issuing rights to support infrastructure investment projects such as toll road, power plant, property, port, and bridges.

Adhi's President Director Bambang Triwibowo has set target of new contracts of Rp14.8 trillion this year, similar with last year contracts.

Net profit is expected to reach 25% growth this year from last year estimation of Rp120 billion. Revenue is calculated to reach Rp8.6 trillion from last year level of Rp7.7 trillion.   

   

Matahari needs to redeem bonds

Moody's Investors Service has placed PT Matahari Putra Prima Tbk's (MPPA) B1 corporate family and senior unsecured bond ratings on review for possible downgrade. The rating agency notes that MPPA need to redeem its outstanding bonds.

The rating action is in response to the Matahari's recent announcement of its proposed sale of its subsidiary PT Matahari Department Store Tbk (LPPF/MDS) valuing at approximately US$770 million. The sale is subject to regulatory approvals.

"While the proceeds to be received will greatly improve MPPA's near-term liquidity -- with the result of a net cash position -- Moody's is concerned that the sale of MDS will negatively impact the company's operating and business risk profiles," says Ken Chan, a Moody's Vice President.

"The sale will result in a loss of MDS's EBITDA contribution to MPPA, which represents approximately 60%-70% of the company's EBITDA annually," says Chan, adding that, MDS is the largest department store operator in  terms of market share in Indonesia and is highly profitable with EBITDA margins of 10%-12%."

There also remains a high level of uncertainty over the ultimate usage of the sale proceeds. Moody's notes that the bond indentures are loose on the type of replacement assets that the company can re-invest into, a situation which could result in a material change in its business risk profile.

MPPA may choose to pay down a major portion of its debt. Moody's also notes that MPPA will need to redeem the outstanding bond amount in full if the cash portion is below 75% of the total sales proceeds under the bond indentures.

Despite the potential for lower leverage, MPPA's overall credit profile may not support the original B1 rating, if it organically grows its food business, which has lower profit margins. The overall operating scale of the company will also be much smaller. In its review, Moody's will evaluate Matahari's intended use of the  proceeds and its expansion strategy and their resultant impact on the company's overall credit profile upon the successful completion of this transaction.

Chandra Asri bonds get B+ from S&P

Standard & Poor Ratings Services (S&P) said today that it had affirmed its B+ long-term corporate credit rating on Indonesia-based PT Chandra Asri, a company owned by PT Barito Pacific Tbk which is controlled by Indonesian tycoon Prajogo Pangestu. The outlook is stable.

At the same time, the rating agency affirmed  B+ foreign-currency issue rating on the proposed senior secured notes to be issued by Altus Capital Pte. Ltd. and guaranteed by Chandra Asri.

These notes, originally scheduled for launch in the fourth quarter of 2009, were postponed because of the market conditions prevailing at the time.

The issue rating on Altus' proposed notes issuance reflects the unconditional and irrevocable guarantee by Chandra Asri and its subsidiary PT Styrindo Mono Indonesia.

Altus Capital, a wholly owned entity of PT Chandra Asri, was established solely for the purpose of issuing debt securities, and will lend the proceeds of the notes to Chandra Asri. The rating on the notes is subject to finalization of documentation, and confirmation of amounts and terms.

"We expect some of the proceeds from the proposed notes issue to be used to repay in full the outstanding amount on an existing term loan facility, without the company incurring any prepayment penalty. Chandra Asri will use any remaining amount to repay an existing subordinated loan provided by a former shareholder, Strategic Investment Holdings Ltd," an announcement said.

The affirmed rating on Chandra Asri reflects the company's cyclical commodity chemicals business, exposure to rising feedstock costs, and limited product and operational diversity, said Standard & Poor's credit analyst Allan Redimerio.

The stable outlook on the long-term corporate credit rating on Chandra Asri reflects our expectation that the company will maintain its leading market position and competitive cost advantage in Indonesia.

Matahari deal payment structure

CVC Capital Partners, one of largest private equity company globally, has agreed with PT Matahari Putra Prima Tbk (MPPA) to settle 90.76% acquisition of PT Matahari Department Store Tbk (MDS) (LPPF)with combination of cash, shares and warrants issue, and vendor loan.

MPPA and CVC on January 23 2010 signed sale and purchase agreement of 90.76% or 2.65 billion shares at MDS worth Rp7.17 trillion or Rp2,705.33 per share.

CVC, that acquires MDS via Meadow Asia Company Limited (MAC), will control 80% stakes at MAC and the remaining goes to MPPA. In return, CVC will effectively own 72.16% stakes at MDS.

The private equity, headquartered in Luxembourg, Europe, will pay MDS deal with cash, shares and warrants that will be issued by MAC, and loan from MAC or its subsidiaries, to MPPA.          

According to an analyst from a local brokerage, MPPA, which is controlled by Riady family through AcrossAsia Limited Hong Kong and PT Multipolar Tbk, will obtain at least Rp3 trillion of net cash from the deal, given MPPA has net debt of Rp1.3 trillion.

"What is next strategy of MPPA with cash rich position?," he said. He said CVC, owner of Debenhams, should do something on it. In Indonesia, Debenhams license is owned by PT Mitra Adiperkasa Tbk.

If CVC withdraws or not to extend the license and give it to MDS, it would be additional value for MDS and MPPA indirectly. 

"We are very positive on Indonesia and looking forward to the continued development of MDS as leading retail player in the country and partnership with Lippo Group," Sigit Prasetya, CVC Asia (Singapore)'s partner, Sigit Prasetya told Insider Stories.

CVC funds nowadays own 52 companies worldwide employing approximately 285,000 people in numerous countries. Together these companies have combined annual sales of €88 billion.

The current European portfolio totals 39 investments and includes:

*Formula One - the world's leading motor sport rights management business.

*Saga/AA - a leading affinity brand business.

*Cortefiel - one of the largest specialized clothing retailers in Spain.

*Flint Group - a global supplier to the printing, converting and colourant industries.

*Elster Group - the world’s largest manufacturer of utility meters.

The current Asian portfolio totals 16 investments and includes:

*PBL Media - Australia's largest diversified media group (including Channel Nine and NineMSN).

*Minit Asia Pacific - the high-end shoe repair, key cutting, engraving and watch repair services.

*Plantation Timber Products - a leading manufacturer and distributor of high-end, medium-density fibre panels and laminate flooring.

*Amtek - the second largest precision engineering and the largest metal stamping company in Singapore.

Benakat IPO price Rp120-Rp140/share

Oil and gas producer PT Benakat Petroleum Energy has set an initial price for its public offering at the range of Rp120-Rp140 per share, allowing the company to grab Rp1.38 trillion-Rp1.61 trillion.

Benakat, that is planning to issue 11.50 billion of shares during IPO equals 38.24%, is controlled by PT Indotambang Perkasa of 89.97% and PT Inti Permata Nusantara of 10.03%.

Along with shares issue, the company has determined to unveil 6,50 billion warrants with ratio of 1:1. Warrants are offered at the price range of Rp125-Rp145, providing it with potential fresh cash of Rp2.19 trillion-Rp2.55 trillion in the next 6 months after IPO.

Benakat Petroleum President Commissioner Erry Firmansyah, former Indonesia Stock Exchange President Director, said proceeds from initial share sale will be useful to jack up oil production capacity from 2,000 barrel per day to 5,000 barrel, which is to reach 6,000 barrel per day in 2011.

Adding to that, Benakat Petroleum is looking for potential acquisition of oil fields both domestically and overseas.

The oil company is going to use IPO proceeds to underpin development of oil and gas production facility, coal, and supporting production facilities purchase.

Benakat Petroleum is in joint operating cooperation with PT Pertamina-EP to develop Benakat Barat Block in Prabumulih, South Sumatra.Benakat Petroelum is an integrated energy sources services in Indonesia with scope of works covering oil and gas, coal, and engineering, procurement, and construction for energy facilities. Controlling share holders of Benakat Petroleum is PT Indo Tambang of 89% and PT Inti Permata Nusantara of 12%.

Bhakti Investama to roar

Holding company of Bhakti Group that is led by Indonesian tycoon Bambang Hary Iswanto Tanoesoedibjo, PT Bhakti Investama Tbk (BHIT), seems to has tons of exaggerated acquisition stories on gold and coal mining companies worth US$300 million.

In to do so, he is planning to seek US$150 million of financing, half of acquisition target. "This year will see awakening of marge and acquisition from Bhakti worth US$200 million-US$300 million," he said as reported by Bisnis Indonesia today.

 

Bumi Serpong to issue dollar bonds

Property developer under Sinar Mas Group, PT Bumi Serpong Damai Tbk (BSDE), is planning to issue US dollar denominated bonds to underpin expansion projects.

A source as reported by Bisnis Indonesia today said the company is attempting to grab US$500 million in the bounce back of global debt market.

Sinar Mas Group Managing Director Gandi Sulistiyanto said proceeds from the debts issue will be used by Bumi Serpong to support projects financing. "But, we can't explain the size in detail."

Bumi Serpong President Director Harry Budi Hartanto said the company will allocate Rp1 trillion in capital expenditure from internally generated cash flow in a bid to reach Rp1.5 trillion of revenue, grow 16.28% compared to last year revenue of Rp1.29 trillion.

BSDE is reported to post 38.2% jump in 2009 net profit to Rp308.7 billion compared to a year before of Rp223.5 billion. Net margin skyrocketed from 16.1% in 2008 to 24.3% last year. The company enabled to slash cost of goods sold and operation cost during January to December last year. In return, operating profit rose 10.8% from Rp412 billion in 2008 to Rp456.5 billion.

The company had squeezed others income of about 25% to Rp80.3 billion, which in result soared its bottom line significantly.  

Despite positive jump in net profit, Bumi Serpong's 2009 revenue slightly lowered of 8.3% from Rp1.39 trillion to Rp1.27 trillion. Gross profit decreased 1.4% from Rp641.7 billion to Rp632.6 billion last year. But, the developer's gross margin remained intact. 
In a daily research published by BNI Securities today, the brokerage says that Bumi Serpong still has promising fundamental performance. It may keep to grow in line with property sector recovery as well as global economic bounce back. Bumi serpong (BSDE) has decided to scrap an extraordinary general meeting (EGM) that was scheduled on February 8 2010.

BUMI: No intention to issue new shares

Management of PT Bumi Resources Tbk (BUMI), Indonesia largest coal mining producer, confirmed that the company at this point of time has no intention to issue new shares (non-preemptive rights), countering a market rumor yesterday that non-preemptive rights would be exercised at Rp2,925 per share.

Bumi few weeks ago scrapped an extraordinary share holders general meeting with main agenda of non-preemptive rights without explaining a clear reason.

In a morning daily report published by PT Kim Eng Securities today, Bumi Investor Relations Dileep Srivastava said the decision not to issue new shares after considering market condition and political situation.

According to him, at the current level of US$1.3 billion of debt is already at 4x adjusted EBITDA, a maximum gearing allowed by China Investment Corporation (CIC)'s covenants. Kim Eng suspects that both parties, Bumi and CIC, failed to reach agreement on pricing and terms.

"However, we have impression that the covenant only covers for existing coal operation in KPC and Arutmin, less interests owned by Tata. In other words, Bumi is still able to raise more debts by pledging its non coal assets, like Herald Resources or even say its minority interest in Newmont Nusa Tenggara," the report said.

CIC  was last weeks cheduled to hold a frenzy meeting in Bali to determine next projects at companies under Bakrie Group should be developed. A source familiar with the matter said CIC and Bumi will discuss about non-preemptive rights of 10% shares following loan agreement of US$1.9 billion.

BUMI non-preemptive rights at Rp2,925?

A market rumor about exercise price of PT Bumi Resources Tbk (BUMI)'s non-preemptive rights  is spreading today.

According to a market player said Bumi, Indonesia largest coal mining, has submitted preemptive rights documents to the Capital Market Supervisory Agency (Bapepam-LK) in the evening after market closing. "Standby buyer for the corporate action is China Investment Corporation [CIC]." he said.

Bumi and CIC held a frenzy meeting last week in Bali in a bid to continue exploring possibility of long term strategic partnerships with Bakrie Group. One of the meeting discussion was the exercise Bumi's non-preemptive rights of a maximum 10% of new shares, following  US$1.9 billion of loan agreement.

"The meeting won't discuss only Bumi non-preemptive rights. CIC is looking an investment opportunity, especially in infrastructure projects," a source said. The meeting will be attended by important key executives of Bakrie Group companies.

(BUMI) and CIC are in talks for a possible debt swap. A source 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.

INCO CEO Arief Siregar resigns

PT International Nickel Indonesia Tbk (INCO) President Director Arief Siregar has decided to resign from his current position due to take a rest.

"I am old enough and tired. I should be in the position for the next two year," he said at House of Representative today.

According to him, the resignation has not yet accomplished before obtaining agreement from share holders general meeting.

The country’s largest nickel producer, INCO, a subsidiary of Brazil’s Vale Inco, said its net profit fell by 70.1% to US$110 million in the first nine months to September.

Sales during the period dropped 53 percent to $526 million. Inco recorded a net profit of $369 million on sales of $1.13 billion in the same period last year.

For the three months to September, the company posted a net profit of US$75.9 million, compared with US$17.4 million in second quarter, while sales stood at US$249.8 million, up from US$155 million in the previous quarter due to an uptick in nickel prices. Production in the third quarter was 17,800 tons, up from 16,300 in the second quarter.

Output for the first nine months totaled 50,300 tons, down from 56,200 in the same period last year.

3 Cell Operators ratings upgraded

Fitch Ratings has today upgraded long-term foreign currency (LTFC) issuer default ratings (IDRs) of PT Telekomunikasi Selular (Telkomsel) and PT Indosat Tbk (Indosat) to BBB- from BB+, as well as the LTFC IDR of PT Telekomunikasi Indonesia Tbk (TLKM) to BB+ from BB.

At the same time, Fitch has upgraded Telkomsel's Long-term local currency (LTLC) IDR to BBB from BBB-. The outlook on all ratings are stable.

These positive rating actions follow Fitch's recent upgrades of Indonesia's Sovereign ratings, where the LTFC and LTLC IDRs were upgraded to BB+ from BB with a stable outlook. The country ceiling was also upgraded to BBB- from BB.

Telkomsel:

LTFC IDR upgraded to BBB- from BB+, stable outlook

LTLC IDR upgraded to BBB from BBB-, stable outlook

Senior unsecured rating upgraded to BBB- from BB+

Indosat:

LTFC IDR upgraded to BBB- from BB+, stable outlook

LTLC IDR affirmed at BBB-, stable outlook

Senior unsecured rating upgraded to BBB- from BB+

Telkom:

LTFC IDR upgraded to BB+ from BB, stable outlook

LTLC IDRs upgraded to BB+ from BB, stable outlook

Senior unsecured rating upgraded to BB+ from BB

Fitch assigns B+ for Star Energy

Global rating agency Fitch Ratings has today assigned Indonesia's Star Energy Geothermal (Wayang Windu) Limited (SEG) a long-term foreign currency issuer default rating (IDR) and a senior secured rating of B+. The Outlook is Stable.

Fitch has also assigned an expected rating of B+ and an expected recovery rating of RR4 to the proposed dollar denominated senior secured notes. The ratings were assigned based on an indicative issue size, price, and tenor communicated to the agency by Star Energy any material deviation from which may result in a negative rating action. The final ratings are contingent upon receipt of final documents conforming to information already received.

"Star Energy's ratings reflect its strong track record of reliable operating performance, its base-load generation status and the long-term 'take or pay' energy sales contract which underpins the company's stable and recurring revenue and cash flow," said Simon Wong, Director in Fitch's Asia-Pacific energy and utilities team, in a press release today.

Star Energy, founded in 2003, was previously owned by PT Nusantara Capital and Indonesia tycoon Supramu Santoso. In September 2007, founding father PT Barito Pacific Tbk (BRPT) Prajogo Pangestu acquires Star Energy from Supramu. Prajogo controls majority stakes in Star Energy (Kakap) Ltd and Star Energy (Sebatik) Ltd. In December last year, Star Energy was considering to secure US$300 million-US$400 million of loans to bankroll development geothermal-based electricity power plant Wayang Windu Unit 3 in West Java with capacity of 173 MW. 

Fitch notes however that the ratings are constrained by Star Energy's single site operation, inherent risks in conducting geothermal operations in a seismic active area, as well as concentration risk of a sole electricity off-taker, PT Perusahaan Listrik Negara (PLN). "Also, the large capex program to develop Unit 3, with a gross installed capacity of up to 127MW by mid-2013, is expected to significantly increase SEG's negative free cash flow during 2010-2013 and delay the company's ability to de-leverage," notes Mr. Wong.

The stable outlook is based on Star Energy's expected stable cash flow generation profile, abundant geothermal resources and long-term 'take or pay' energy sales contracts.

At end-September 2009, Star Energy had total debt of US$406.2 million, which comprised senior secured term loans of US$281.9 million, an interest rate swap liability of US$23,3 million carried at fair-value, and subordinated shareholder loans of US$101 million.

A successful refinancing of the secured term loans with the proposed notes is expected to reduce Star Energy liquidity risk, due to a demanding principal repayment schedule on the secured term loans. Refinancing risk for the proposed notes is moderate and reflected in the 'B+' ratings. However, Fitch expects that when Unit 3 starts commercial operation, SEG will generate positive free cash flow, subject to the company's further investment plans.

Star Energy is one of the largest geothermal electricity producers in Indonesia, with total installed capacity of 227MW. It has exclusive rights to exploit and utilise geothermal resources at the Wayang Windu contract area located in the highlands of West Java.

Telkom unit acquires Admedika

PT Telekomunikasi Indonesia Tbk (TLKM)'s subsidiary PT Multimedia Nusantara (Metra) has signed a conditional sale and purchase agreement to acquire 75% stakes of PT Administrasi Medika (Admedika) on January 25 2010.

In a public announcement to Indonesia Stock Exchange, Telkom said acquisition of Admedika, electronic health care network provider, is expected to accomplish at the end of February. Following the closing, Metra will fully control Admedika.

Telkom President Director Rinaldi Firmansyah said acquisition is a strategic path to inline with Indonesia insurance shared service platform (InsureNet). Five insurance companies such as Taspen, Jamsostek, Askes, Jasa Raharja, and Asabri, have joined InsureNet.

Admedika acquisition is also along with Telkom Group to strengthen portfolio business in IT services. In 2008, Metra closed buyout of 80% stakes in PT Sigma Citra Caraka, stellar IT company in Indonesia.

Telkom in early December last year 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.

 

First Media secures US$32 million loan

PT First Media Tbk (KBLV) has seized US$32 million of loan from Falcon Private Bank Ltd, Singapore. First Media signed a credit facility agreement with Falcon Bank on January 22 2010. Of US$32 million, around US$27 million is roll over loan facility.

First Media is controlled by AcrossAsia Limited of 55.11% and PT Reksa Puspita Karya owns 33.77%, while public investors hold 11.12%. First Media, has the same controlling share holder with PT Multipolar Tbk, is a company under Lippo Group which is controlled by Riady family.

During January to September last year, KBLV posted Rp531.28 billion in revenue, grew from the same period in 2008 of Rp395.83 billion.

Operating profit rose from Rp25.83 billion at the end of September 2008 to Rp39.77 billion last year. The company also posted other income of Rp26.49 billion in September last year compared to other charges of Rp24.39 billion in 2008.

In return, First Media's bottom line skyrocketed to Rp46.68 billion in net profit from the same period in 2008 which made net loss of Rp1.37 billion.

Bumi Serpong sets Rp1 trillion capex

Property developer arm under Sinar Mas Group, PT Bumi Serpong Damai Tbk (BSDE), has set Rp1 trillion of capital expenditure (capex) this year. Around 70% of it will be used to develop projects, 20% is intended to prop up infrastructure facilities, and the remaining is for land clearing.

Bumi Serpong's President Director Harry Budi said the company will utilize internally generated cash flow to bankroll capex. Cash and cash equivalent reaches Rp1.05 trillion. BSDE is reported to post 38.2% jump in 2009 net profit to Rp308.7 billion compared to a year before of Rp223.5 billion. Net margin skyrocketed from 16.1% in 2008 to 24.3% last year.

The company was able to slash cost of goods sold and operation cost during January to December last year. In return, operating profit rose 10.8% from Rp412 billion in 2008 to Rp456.5 billion. Bumi Serpong had squeezed others income of about 25% to Rp80.3 billion, which in result soared its bottom line significantly.  

Despite positive jump in net profit, Bumi Serpong's 2009 revenue slightly lowered of 8.3% from Rp1.39 trillion to Rp1.27 trillion. Gross profit decreased 1.4% from Rp641.7 billion to Rp632.6 billion last year. But, the developer's gross margin remained intact. 

In a daily research published by BNI Securities today, the brokerage says that Bumi Serpong still has promising fundamental performance. It may keep to grow in line with property sector recovery as well as global economic bounce back. Bumi serpong (BSDE) has decided to scrap an extraordinary general meeting (EGM) that was scheduled on February 8 2010.

Property developer under Sinar Mas Group planned to invite a strategic investor during non preemptive rights of 10% maximum of new shares issue. It is like what was planned by PT Bumi Resources Tbk (BUMI).

Both Bumi Serpong and Bumi Resources are attempting to allow strategic investors to enter their companies after Indonesia Capital Market Supervisory Agency (Bapepam-LK) issues a revised non preemptive rights from 5% maximum to 10%.

Vendors dominate PP IPO

Initial public offering (IPO) of PT Pembangunan Perumahan (PP) is dominated by its vendors. Where are retail investors?

According to a source, as reported by Bisnis Indonesia today, PP vendors demand reach Rp200 billion-Rp300 billion, more than half of PP IPO target of Rp581.28 billion. "Vendors are willing to buy PP initial shares, while retail investors are demanding lower price," a source said.

PP is planning to offload 21.46% of shares during IPO at Rp560 per share, close to the lowest level of IPO price range of Rp530-Rp900 per share.

It seems PP needs more supports from its vendors to obtain IPO target due retail investors know that the initial price is not as cheap as its peers.

Based on PT Mandiri Sekuritas estimation, IPO underwriter, PP is calculated to book Rp254 billion in net profit this year and Rp309 billion next year. The company's 2009 revenue to reach Rp6.26 trillion.

PT Danareksa Sekuritas, another underwriter, estimated that PP, state-owned contractor, will post Rp258 billion net profit this year and Rp308 billion next year. Revenue will reach Rp6.37 trillion this year.

   

Bakrie mandates CS & Nomura

Holding investment company of Bakrie family, PT Bakrie & Brothers Tbk (BNBR), has mandated  Credit Suisse and Nomura Securities to arrange and manage equity linked notes  issue worth US$150 million-US$200 million.

A source familiar with the matter said Bakrie, which is planning to unveil the notes in February-March this year, will use proceeds to refinance its debts and prop up investment programs. "Bakrie finally decided to appoint Credit Suisse and Nomura to help advising equity linked notes issue," a source said.   

Bakrie Finance Director Eddy Soeparno confirmed the appointment of both lead arrangers for the notes. According to him, the company will combine both convertible and exchangeable bonds, allowing it to settle in cash. Bakrie may use shares of PT Bakrie Sumatera Plantations Tbk (UNSP) to support exchangeable bonds.

Referring to Bakrie's public expose handout in medio December last year, its long term debts worth Rp5.21 trillion due in 2012, non repurchase agreement short term loans of Rp1.51 trillion, and Rp220 billion of repos which was redeemed in December 2009.

Bakrie's September 2009 revenue dropped to Rp5.33 trillion compared a year before of Rp6.38 trillion. Adding to that, operating profit tumbled from September 2008 of Rp952 billion to Rp515 billion at the end of September last year. Net profit posted a steep nose dive from Rp886 billion in September 2008 to Rp40 billion at the end of September last year.

Indosat retains No.2 largest operator

PT Indosat Tbk (ISAT) is estimated to keep retaining the second largest cellular operator in Indonesia after posting 32.7 million subscribers in 2009, slightly higher than its fiercest competitor PT XL Axiata Tbk (EXCL) which is predicted to grab 32.4 million subscribers.  

In a research report published by Macquarie Equity Research in January 21, Indosat is focusing on maintaining No.2 status on all key parameters. Management commentary suggests ISAT is clearly focused on maintaining its second largest position, which suspected will provide a competitive undercurrent throughout FY10 as XL Axiata looks to capitalise on ISAT’s internal restructuring.

Industry feedback suggests ISAT may post 4 million net adds subscribers in fourth quarter last year, totalling 32.7 million subscribers, while XL posted 5.8 million net adds, totalling 32.4 million, resulting in ISAT maintaining its No.2 market share.

First quarter 2010 results in regards to revenue and ARPU will be key in determining the effectiveness of the campaigns by both Indosat and XL to generate these strong net adds.

"We await a sustained improvement in the underlying operating results before turning positive on Indosat. More specifically, improved ARPU in conjunction with strong net adds will be key drivers for

Indosat to re-rate given management’s strategy of attracting higher ARPU customers but with limited discounting. We note that Indosat’s ARPM is amongst the highest making effective price increases more challenging," the research said.

Macquarie has lowered Indosat target price by 4% to Rp5,000 per share from Rp5,200.

Fitch upgrades Indonesia to BB+

International rating agency Fitch Ratings today has upgraded the Indonesia's long-term foreign and local currency Issuer Default ratings (IDRs) to BB+ from BB, respectively. The outlooks on the ratings remain stable.

At the same time, the agency also jacked up Indonesia Ceiling to BBB- from BB+ and affirmed the Short-term foreign currency IDR at B.

"The rating action reflects Indonesia's relative resilience to the severe global financial stress test of 2008-2009 which has been underpinned by continued improvements in the country's public finances, a fundamental sovereign rating strength, and a material easing of external financing constraints," said Ai Ling Ngiam, Director, in Fitch's Sovereign Ratings team, in a press release today.

Public debt ratios continued to decline throughout 2009, falling to 30% of GDP (compared to a 'BB' median of 40%), and international reserves including gold, rose 28% to US$66 billion, as the economy recorded the eighth-highest economic growth rate (4.6%) among all Fitch-rated sovereigns.

Indonesia's sovereign creditworthiness is backed by its strong public finance track record relative to its peers. Indonesia was one of 15 Fitch-rated sovereigns which registered a year-on-year decline in the general government debt position as a share of GDP in 2009. With the current macroeconomic path and fiscal policy framework, Indonesia's public debt/GDP looks set to continue on a downward trend during Fitch's forecast period.

"There is fiscal flexibility for the authorities to embark on an ambitious agenda to tackle longer-term developmental issues, such as addressing infrastructure constraints and investment promotion as well as raising industrial and export competitiveness, which are central to further alleviating Fitch's concerns on risks surrounding Indonesia's external finances," said Ngiam.

However, Fitch revealed longer-term developmental priorities risk becoming sidelined if fiscal expenditure inefficiencies remain unresolved due to delays in electricity tariff and fuel price adjustments. As a result, incentivied smuggling of oil may add volatility to the balance of payments through abnormal spikes in oil imports. Further, sudden investor risk aversion and capital outflows may arise on the back of more severe or abrupt administrative price adjustments in 2011.

Looking ahead, Indonesia's relatively shallow capital markets remain vulnerable to risks surrounding a reversal of high-yield carry trades or sudden emerging-market risk aversion. Policy credibility against potential "hot money" reversals would be bolstered by further strengthening of the monetary policy framework, including achieving greater price and exchange rate stability; deepening of the country's debt and capital markets; and building additional foreign exchange buffers.

The economy is better placed than before to face abrupt portfolio outflows on the back of sudden investor risk aversion or oil price hikes, due to exchange rate flexibility, further improvement in external finances resulting from foreign reserves (FXR) accumulation, lower gross external financing requirements, and a stronger international liquidity position.

Fitch forecasts Indonesia's gross external financing requirement, including short-term external debt, at 43% of FXR in 2010, compared with the BB median of 82%.

Indonesia's international liquidity ratio is forecast at 192% in 2010 (liquid external assets liquid external liabilities), the highest since 1990 and higher than the 'BB' median of 185%. This provides a buffer against temporary closures of international capital markets or sudden reversals in capital flows.

AALI posts Rp6.55 trillion sales

PT Astra Agro Lestari Tbk (AALI) posted sales value of Rp6.55 trillion during January to December last year, decreased compared to a year before. 

CPO sales volume of PT Astra Agro Lestari Tbk (AALI) during January-December 2009 reached 1.05 million tons, soared 8.8% compared to the same period in 2008 of 970,568 tons.

Around 86.1% of the company's total volume (909,670 tons) sold in the local market while the remaining went to export. CPO average selling price reached Rp6,242 per kg, decreased 15.7% compared to the same period in 2008.

Kernel price dropped 34.2% to Rp2,586 per kg with its sales volume reached 151,424 tons, 8% lower than 2008. Astra Agro's fresh fruit bunch production grew 9.1% to 4.3 million tons from 3.9 million tons in 2008. The yield of the company's FFB increased by 5.6% to 21.84 ton per hectare as well as kernel production was rose 8.6% to 232.243 ton.

During January-September 2009, subsidiary of PT Astra International Tbk (ASII) posted Rp5.46 trillion in net sales, lowered compared to a year before of Rp6.69 trillion. Following to that, the company's operating profit took a steep plunge from Rp3.11 trillion to Rp1.91 trillion at the end of September 2009.

Astra Agro's net profit tumbled to Rp1.25 trillion or Rp792.54 per share at the end third quarter 2009 compared to the same period in 2008 of Rp2.13 trillion or Rp1,352.54 per share.

CVC buys Matahari Rp2,164/share

One of the largest global private equity company CVC Capital Partners has agreed to buy 72.61% of shares in PT Matahari Department Store Tbk (LPPF) directly at Rp2,164.32 per share from PT Matahari Putra Prima Tbk (MPPA).

In a public announcement to Indonesia Stock Exchange today, CVC has set up a joint venture company with Matahari Putra Prima dubbed Meadow Asia Company Limited that has agreed to acquire 90.76% of Matahari Department Store's shares C series or 2.65 billion of shares at Rp2,705.33 per share or Rp7.17 trillion or US$779 million.

Matahari Putra Prima and Meadow Asia Company signed sale and purchase agreement on Matahari Department Store on January 23 2010. Under such agreement, Matahari Putra Prima owns 20%  in Meadow Asia and the remaining is belong to CVC Capital.

Adding to that, CVC will acquire 72.61% of shares in Matahari Department Store, while Matahari Putra Prima will seize 18.15% shares or Rp541 per shares or Rp260.21 billion.

A strategic joint venture with CVC Capital is expected to regain trusts from global investors as well as foreign investment in Indonesia.

Adding to that, Matahari Department Store has obtained financing commitment letter from PT CIMB Niaga Tbk (BNGA) and PT Standard Chartared Bank.

Henry Ho to replace Sebastian Paredes?

PT Bank Danamon Tbk (BDMN)'s President Director Sebastian Paredes has submitted his resignation from current position. Former PT Bank Internasional Indonesia Tbk (BNII)'s President Director Henry Ho Hon Cheong may be prepared for the position, replacing his predecessor. 

In a public announcement to Indonesia Stock Exchange todar morning, Bank Danamon's Corporate Secretary Dini Herdini said Paredes resignation will be effective after share holders general meeting scheduled in April 2010.

Bank Danamon's Vice President Director Jos Luhukay said Parades resignation will be explained in a press conference today afternoon at 1.00 pm in Shangrila Hotel.

Bank Danamon controlling share holder designated Paredes as President Director on May 9 2005. A graduation from Master International Business Administration dari Instituto de Empresa, Madrid, Spanyol, and Bachelor of Science dari California University, Fresno, California State University, US, spent his time as Citigroup banker.

A market rumor said Jerry Eng, former Bank Danamon's Director which is now a President Director of PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) is also approched to replace Paredes.  

Bumi Serpong profit soars 38%

PT Bumi Serpong Damai Tbk (BSDE) is reported to post 38.2% jump in 2009 net profit to Rp308.7 billion compared to a year before of Rp223.5 billion. Net margin skyrocketed from 16.1% in 2008 to 24.3% last year.

BSDE, a property developer under Sinar Mas Group, was able to slash cost of goods sold and operation cost during January to December last year. In return, operating profit rose 10.8% from Rp412 billion in 2008 to Rp456.5 billion.

The company had squeezed others income of about 25% to Rp80.3 billion, which in result soared its bottom line significantly.  

Despite positive jump in net profit, Bumi Serpong's 2009 revenue slightly lowered of 8.3% from Rp1.39 trillion to Rp1.27 trillion. Gross profit decreased 1.4% from Rp641.7 billion to Rp632.6 billion last year. But, the developer's gross margin remained intact. 
In a daily research published by BNI Securities today, the brokerage says that Bumi Serpong still has promising fundamental performance. It may keep to grow in line with property sector recovery as well as global economic bounce back. Bumi serpong (BSDE) has decided to scrap an extraordinary general meeting (EGM) that was scheduled on February 8 2010.
Property developer under Sinar Mas Group planned to invite a strategic investor during non preemptive rights of 10% maximum of new shares issue. It is like what was planned by PT Bumi Resources Tbk (BUMI).
Both Bumi Serpong and Bumi Resources are attempting to allow strategic investors to enter their companies after Indonesia Capital Market Supervisory Agency (Bapepam-LK) issues a revised non preemptive rights from 5% maximum to 10%.
BSDE's meeting delay may be related with strategic investors who will buy new shares issued by the company. I think they need more time to buy a company's shares. They need some action like a due diligence and discussion about price.      
The company, which will issue 1.09 billion of new shares maximally, has appointed Macquarie Securities to seek potential stretegic investors.

Indosat to issue US$750 mio bonds

Indonesia second largest cellular operator PT Indosat Tbk (ISAT) is internally in frenzy discussions  with foreign investment banks. Indosat is digging out more advanced advices to confront fiercest rival PT XL Axiata Tbk (EXCL), cellular arm of Axiata Group Berhad, previously named Telecom Malaysia.
After rolling out a beauty contest to pick out financial advisors to review its tower business, Indosat is now coming with dollar denominated bonds issue worth Rp7 trillion to roar its cellular penetration  deeper. The operator is considering to seek financing to support capital expenditure and refinance matured bonds in October and November this year.

"Massive expansion is a must for Indosat, or it will be left behind by XL, which is led by Indosat former Director Hasnul Suhaimi. Indosat gets dizzy to determine a terrific strategy to beat XL," a source said.

Indosat sent out request for proposal to nine foreign investment banks such as Deutsche Bank, Citi, Credit Suisse, ING, Barclays Capital, Nomura Securities, JP Morgan Securities, RBS, and Standard Chartered Bank.  

According to a research report published by PT Danareksa Sekuritas, the operator needs US$600 million-US$700 million of capital expenditure this year, similar with last year capex.XL's capex this year was expected to reach US$400 million-US$450 million.

In October and November, US$234 million and Rp640 billion of bonds will mature, while Indosat's September 2009 cash and cash equivalent was Rp2.24 trillion. Adding to that, the company needs around Rp7 trillion or US$750 million to bankroll capex and refinance bonds this year.
Danareksa's analyst Chandra S. Pasaribu said Indosat claims that it performed well in the last quarter of 2009 after facing stiff competition in the early part of the year. "Although Indosat didn't provide any official numbers during our meeting with the company, it did claim that its subscriber base had edged above 30 million by the end of 2009 after a period of cleaning up related to the so-called calling card
phenomenon," he said.

Looking forward, the internet segment definitely looks more attractive given its low penetration and higher ARPU. Indosat’s total broadband wireless subscribers are less than 1 million in total with ARPU of Rp180-190,000 per month, or much higher than voice and SMS with ARPU of a mere Rp46,000 per month. As for Blackberry subscribers, they total around 250,000 with ARPU of around Rp150,000 per month. The highlights of the FY09 results should be announced by Indosat in late February with the full results coming out before the end of March.

Danareksa remains with sell recommendation for Indosat stocks and set price target of Rp5,300 per share.
In September 2009, Indosat posted 28.70 million of customers, while XL booked 26.64 million. PT Telekomunikasi Selular (Telkomsel) ranked top with 79.77 million customers.

PP sets IPO price Rp560

State-owned contractor PT Pembangunan Perumahan (PP) and its underwriters eventually determined an initial public offering (IPO) price is Rp560 per share, representing 7.38x price to earning ratio (P/E) 2010.

The IPO price is nigh to the lowest level range of Rp530 to Rp900 per share. In relation to the IPO price level, PP will grab Rp582.4 billion.

PP is planning to offload 1.04 billion of shares or 21.46% during its initial public offering debut scheduled on February.

According to Pembangunan Perumahan 2008 financial performance, it posted Rp121.61 billion of net profit or Rp25.13 of earning per share (EPS) with Rp3.93 trillion of revenue. A year before, its revenue was Rp3.22 trillion with net profit of Rp92.98 billion. Referring to 2008 basic EPS, PP initial shares price represents 21.09-35.81x of its 2008 price to earning ratio (PER).

What about its peers valuation such as PT Adhi Karya Tbk (ADHI), PT Wijaya Karya Tbk (WIKA), PT Duta Graha Tbk (DGIK), PT Total Bangun Persada Tbk (TOTL), and PT Jaya Konstruksi Tbk (JKON)?

Based on 2008 EPS of Rp46.04, ADHI is now traded at 8.79x PER, WIKA comes with 12,15x PER, DGIK is around 7.92x PER, while TOTL and JKON are valued at 30.28 and 20.99x PER respectively.

BNI eyes double digit profit

PT Bank Negara Indonesia Tbk (BBNI) is eying double digit growth in net profit this year compared to an estimated net profit last year of Rp2 trillion, a steep jump from a year before of Rp600 billion.

BNI Finance Director Yap Tjai Soen said the bank has set a loan target to rise 15% in 2010 from 2009's estimated growth of 10%-12%.

In order to expand its growth, BNI is planning to unveil US$300 million of 5 years subordinated bonds in the first half this year. Barclays Capital and JP Morgan Securities are advising BNI for the issue.

BNI hopes that bond proceed is available to jack up capital adequacy ration in relation to credit expansion target of 15%-20% growth.

A US$300 million subordinated debt is calculated to improve 1%-2% of BNI capital adequacy ratio from current level of 14.2%.

In debt underwriting market last year, Barclays ranked two with an underwriting of US$2.82 billion or 34.6% after UBS Securities with portion of US$2.866 or 35.2%. Bank of America-Merrill Lynch and Credit Suisse respectively ranked third and fourth with underwriting positions of US$580 million and US$416.67 million.

In 2008, Nomura Holding and Credit Suisse were reigned first and second positions with underwriting commitments of US$1.4 billion and US$733.33 million