Financing firm PT Adira Dinamika Multi Finance (ADMF) aims to generate a total of Rp 9 trillion (US$937.01 million) from the issuance of bonds and Islamic bonds. The firm plans to hold several phases of bond issuance, the first phase is scheduled for February.
Publicly listed Adira, part of Bank Danamon, expects to raise Rp 2 trillion from bonds and Rp 500 billion from Islamic bonds during the February bond issuance, Adira chief finance officer I Dewa Made Susila said.
Adira is likely to begin offering the bonds from the middle of January. The maturity period of the bonds will range from one to five years.
“We have yet to decided on the rates because we have to complete the book building process first,” he said.
Made added, PT Danareksa Sekuritas, PT HSBC Securities Indonesia, PT Indo Premier Securities and PT Standard Chartered Securities will act as underwriters for the bond issuance.
The bonds and Islamic bonds are expected to raise Rp 8 trillion and Rp 1 trillion, respectively, when all phases have been completed. Adira will use the funds generated by the bonds to support its financing operations, which cover the motorcycle and car segments.
From January to September 2012, motorcycles dominated the firm’s financing revenues with Rp 2.21 trillion or 72.9 percent, followed by cars with 27.1 percent. According to Made, even though motorcycles still dominate Adira’s revenues, the company has actually experienced between a 12 percent and 13 percent drop in its new motorcycle business year on year, attributed to the slowing sales in the motorcycle industry as a whole.
This year, the industry suffered a blow to sales due to lower commodity prices, such as coal and palm oil, as many customers work in the mining and plantation sectors across Indonesia. The industry was severely affected by Bank Indonesia issuance of the higher down payment policy last June.
In comparison, Adira has seen its car financing grow about 22 percent year on year, in line with the growth in car industry.