State oil and gas producer PT Pertamina and state pawnshop operator Perum Pegadaian are to issue bonds worth US$1.5 billion and Rp 2 trillion ($215 million) respectively this year.
“Our target is in the third quarter of this year,” Pertamina president director Karen Agustiawan told journalists at the office of the State SOE Ministry in Jakarta.
Pertamina is currently in the process of choosing underwriters for the bond issuance. The candidates include Barclays Capital, Credit Suisse, JP Morgan and HSBC.
Karen said proceeds from the bond issuance will be put towards the Rp 39 trillion of capital expenditure (capex) proposed for 2010, which is an increase on the Rp 22 trillion allocated last year.
The company plans to use around Rp 26 trillion of the 2010 capex to expand its upstream activities.
Pertamina expects to boost its oil production by 10.93 percent in 2010. The company estimates that it will produce 193,900 barrels of oil per day (bpd) in 2010 from 174,000 bpd last year. The Cepu block will be expected to contribute significantly to the targeted oil production increase in the coming year.
Pertamina is easily the country’s most profitable state company, contributing about half of the total dividends collected from all state companies annually. The company is expected to pay Rp 13 trillion in dividends to the government from its 2008 performance.
State pawn shop operator Perum Pegadaian plans to issue Rp 2 trillion of bonds in the first half of this year to strengthen its working capital in order to reach a target of Rp 75.85 trillion in turnover, finance director Budiyanto said.
Besides the bond issuance, Pegadaian also plans to seek about Rp 4 trillion in loans from several banks as well as Rp 1 trillion from the capital market. “Several banks have given their commitment to support us,” Budiyanto said. The banks, he said, include Bank BCA, Bank Mandiri, Bank BRI and Bank BNI.
Pegadaian lends short term loans to its customers by pawning their valuables, usually jewelry, electronic goods and motor vehicles, with credit tenure ranging between three months and eight months.
The company is aiming at Rp 1.45 trillion in unaudited net profits in 2010, higher than the Rp 1.26 trillion targeted in 2009. It also aims for Rp 25.15 trillion in assets this year up from Rp 16.71 trillion in 2009.
Until November, the company recorded Rp 44.25 trillion in total revenue and Rp 1.08 trillion in unaudited net profits. Currently it has about 3,266 outlets throughout Indonesia. Last year, the company had about 17 million customers, mostly farmers, traders and fishermen who needed short-term loans to expand their businesses.
The government is preparing for Pegadaian to go public this year or in 2011 to help improve its capital base and good governance.
