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Indonesian port operator eyes $400-million bond float
Publication Date : 20-03-2014
Port operator Pelindo III, which manages facilities in central and eastern parts of Indonesia, will issue US dollar and rupiah bonds worth US$400 million this year to raise funds for the company’s port expansion projects.
Pelindo III finance director Wahyu Suparyono said in Jakarta on Wednesday that the company would soon name the underwriters for the bond offering.
“Half of the target will be generated from the dollar bonds and the rest from the rupiah bonds. We plan on offering the dollar bonds first, and hopefully everything will be completed within the next two months,” Suparyono said.
Pelindo III will hold road shows in several Asian countries as part of efforts to attract foreign investors, he said. He added that the company had yet to set the coupon rate for the debt paper, but that the maturity periods would most likely range from six to seven years.
The $400-million bond issuance is part of Pelindo’s attempt to finance its capital expenditure (capex), which is expected to reach
5 trillion rupiah ($441.97 million) this year. While most of the funds are expected to come from bonds, the remainder will come from bank loans and internal cash, according to Suparyono.
Of the total capex this year, about 76 per cent will be used to finance the construction of Pelindo’s new port in Teluk Lamong, Surabaya, East Java. The port will help ease the traffic congestion in Pelindo’s Tanjung Perak Port, also in Surabaya.
“It will have around 1.5 million TEUs [twenty-foot equivalent units] of capacity, higher than the 1 million TEUs we have now at Tanjung Perak. We will also be able to facilitate bigger vessels as we plan on deepening the docks at Surabaya to 14 metres from the current 9 metres,” he said.
The Tanjung Lamong port is scheduled to commence initial activities in May and to be fully operational by September.
Pelindo III will use the rest of the capex to purchase equipment to be used in enhancing its other ports. It operates 17 ports in areas including Bali; Banjarmasin, South Kalimantan; Bima, West Nusa Tenggara, and Semarang, Central Java.
“We don’t have any plan yet to operate brand new ports in other areas of the eastern part of Indonesia. So far, the business hub for the eastern part is still located in Surabaya and we will simply increase its capacity, including by opening the Tanjung Lamong port,” he added.
Supported by the new and existing ports, Pelindo is expecting to book 10 per cent to 15 per cent growth in revenue and 10 per cent rise in profit in 2014. This will also be supported by the company's cost efficiency program.
Part of the efficiency, Suparyono said, would come from its new cash management agreement with state lender Bank Negara Indonesia (BNI).
The two signed a memorandum of understanding (MoU) in Jakarta on Wednesday. As agreed in the MoU, BNI will provide real-time cash and payment management for Pelindo and its customers.
Late last year, Pelindo III announced plans to spend $68.2 million on container cranes and grab-type ship unloaders to help improve efficiency at its four main ports in Java and Kalimantan.
At the time, Pelindo III spokesman Edi Priyanto said the new cranes and unloaders were expected to arrive in 2015. He said eight container cranes and two grab-type ship unloaders had been ordered from China’s Dalian Huarui Heavy Industry International Co. Ltd.
He said the cranes would be used at Tanjung Perak Port, Tanjung Emas Port in Semarang and Trisakti Port in Banjarmasin.