PP sells Rp 180 billion in notes to repay maturing debts

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State-owned construction company PT PP raised Rp 180 billion (US$19 million) from selling medium-term notes (MTN) to repay the company’s maturing debts.

In an announcement published on Thursday, the company said that the two-year debt instruments, called MTN XVII, were sold through a private placement in a deal arranged by PT Mandiri Sekuritas.

“Parties that bought the MTNs are two institutional investors and several retail investors,” PT PP president director Bambang Triwibowo said in a written statement.

The MTN would mature on Aug. 7, 2014, the file said. The company set a 10.25 percent interest rate for the MTN.

PT PP corporate secretary Betty Ariana said that the MTN would be used to finance the company’s matured notes this August and September. PT PP has two maturing MTNs — the MTN XII series worth
Rp 100 billion and the MTN XIII series worth Rp 75 billion — which mature on Aug. 28 and Sept. 14, respectively.

“We will use the remaining funds to support working capital,” Betty said.

The MTN XVII series are the company’s second notes this year, after the Rp 100 billion MTN XVI series launched in March.

Apart from the short-term debt instrument, PT PP is considering long-term financing instruments. According to Betty, the company is planning to issue bonds amounting to between Rp 500 billion and Rp 800 billion in the first half of next year.

“We will use part of the funds to refinance debts and long-term investments,” she said.

PT PP reported Rp 2.03 trillion in revenues in the first half of the year, increasing by 21 percent compared to Rp 1.67 trillion in the same period last year. The company booked Rp 64.86 billion in net profits in the first six months of the year, jumping 44 percent from Rp 44.99 billion in the same period last year.

According to the financial report, PT PP’s liabilities stood at Rp 5.96 trillion at the end of June, while its equity was at Rp 1.41 trillion.

PT PP bagged Rp 4.5 trillion in new contracts as of June, about 26 percent of its Rp 16.8 trillion target for new contracts by the year’s end. The company is optimistic about meeting its full year target, particularly after it recently won a tender from port operator PT Pelabuhan Indonesia II (Pelindo II) to develop the Kalibaru Port in North Jakarta.

The port will be built on 246 hectares land with total investment in the first phase of development reaching Rp 22.76 trillion.

According to Betty, PT PP will work on several parts of the port project under a Rp 9 trillion contract.

“We are still waiting for the official tender announcement for the Kalibaru Port, scheduled [for release] tomorrow [today Aug. 10],” Betty said.

She also said that her company had also secured a Rp 530 billion contract to develop an apartment building.

Shares in PT PP were unchanged at Rp 650 apiece at the end of the first session of stock trading on Thursday.