Mandiri plans to extend loans of $766 million to Indosat, Antam

The Jakarta Post ,  Jakarta   |  Sat, 09/01/2007 2:03 PM  |  Business

The Jakarta Post, Jakarta

State-owned Bank Mandiri says it may lend a combined US$766 million to PT Indosat, the country's second-biggest phone operator, and PT Aneka Tambang (Antam).

""We are still in negotiations with the two companies on the terms, including the tenors and interest rates,"" Abdul Rahman, corporate director of the Jakarta-based Bank Mandiri told Bloomberg in Bandung on Friday.

Bank Mandiri may lend as much as $500 million to Aneka Tambang, and Rp 2.5 trillion ($266 million) to Indosat, Rahman said.

Meanwhile, Bank Mandiri signed an agreement Friday to provide a loan of up to Rp 50 billion (about US$5.31 million) to sugarcane growers in East Java.

The loan funds, which will be provided for the 2007/2008 planting season, will be disbursed through a partnership arrangement with state-owned plantation firm PT Perkebunan Nusantara (PTPN) X, which buys the sugarcane from the growers.

""The loan, which will carry an annual interest rate of 10 percent and have a maturity of up to 18 months, is targeted at 2,500 local sugarcane growers in six plantation centers in East Java,"" Bank Mandiri director of micro and retail banking, Budi Sadikin, told a media conference after the signing of the loan agreement.

PTPN X's finance director, Thendri Supriatno, said that individual loans of up to Rp 25 million would be made available to growers.

""These loans are expected to help sugar farmers cover their production costs,"" he said.

Thendri added that the scheme was expected to help revitalize sugarcane growing, which in turn would support the sugar industry.

Despite sugarcane growing being one of the most labor-intensive sub-sectors of agriculture, Budi said, it was often neglected.

Indonesia, which was the world's second biggest sugar exporter in the early 20th century, is currently a net importer of 1 million tons of sugar annually.

Bank Mandiri is boosting lending to capitalize on falling borrowing costs and accelerating economic growth. Mandiri raised its lending growth estimate this year to as much as 22 percent from 20 percent, Pahala Mansury, chief financial officer of the bank, said yesterday.

The central bank has lowered its benchmark interest rate 13 times since May last year to spur investment and consumption in Southeast Asia's biggest economy.

The government expects the economy to grow 6.3 percent this year, the fastest rate in 11 years. (09)

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