Summarecon issues bonds for expansion

Thu, 05/08/2008 11:03 AM

Publicly listed property developer PT Summarecon Agung issued Wednesday its first Islamic bonds (sukuk), worth Rp 200 billion (US$21.69 million), and conventional bonds, worth Rp 100 billion, carrying returns of between 13.75 and 14 percent per annum.

The bonds, to be offered between June 10 and 12, would have a five-year maturity period and would be listed on the Indonesia Stock Exchange on June 18, President Director Johannes Mardjuki said Wednesday during a press conference.

"Around 70 percent of the proceeds from these bonds will be allocated for purchasing land in Kelapa Gading and its surrounding area in North Jakarta and 30 percent for working capital," he told reporters.

Corporate secretary Michael Yong said previously the company intended to issue up to Rp 500 billion in bonds.

"Since interest rates on state bonds have increased to 12.5 percent from less than 11 percent two months ago, we decided to reduce our bonds to Rp 300 billion," he said.

Summarecon has appointed PT Andalan Artha Advisindo Sekuritas and publicly listed PT Kresna Graha Sekurindo to underwrite the bonds.

The company's net profit in the first quarter decreased to Rp 36.76 billion from Rp 43.83 billion due to the increasing tax charge, Michael said.

In anticipation of increases in the price of construction materials, the company has signed agreement contracts with its suppliers to ensure fixed prices for six months to a year. -- JP/rff

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