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Indofood to raise Rp 2 trillion for refinancing, repaying loans
Publicly listed PT Indofood Sukses Makmur (INDF), one of the worldâs biggest noodle makers, said on Wednesday that it was issuing Rp 2 trillion (US$174 million) in bonds to refinance its bonds and repay bank loans
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ublicly listed PT Indofood Sukses Makmur (INDF), one of the world's biggest noodle makers, said on Wednesday that it was issuing Rp 2 trillion (US$174 million) in bonds to refinance its bonds and repay bank loans.
The indicative fixed interest rate of its planned five-year bond issue will be in the range of 9.5 percent to 10.13 percent per year.
PT Mandiri Sekuritas, PT BCA (Bank Central Asia) Sekuritas, PT DBS Vickers Securities Indonesia, PT Indo Premier Securities and PT Trimegah Securities Tbk have been appointed as the joint lead underwriters for the bond issuance.
'Indofood will use the funds obtained from the bond offering, after net of issuance cost, to refinance the 2009 bond issuance and to repay the company's short-term bank loans,' said Mandiri Sekuritas managing director Imam Rachman.
Indofood in 2009 issued the Indofood Sukses Makmur Bond Series V 2009, amounting to Rp 1.61 trillion and maturing on June 18 this year.
Indofood did not disclose details of its lenders. The loans, based on the company's preliminary prospectus, had been used to finance the company's working capital.
Imam says that the book-building period for Indofood's latest bond offering is scheduled to take place from May 14 to 23 and the offering period will be from June 5 to 10. The debt papers will be listed on the Indonesian Stock Exchange (IDX) on June 16.
The Indofood five-year bond has received an idAA+ (double A plus; negative outlook) rating, with a stable outlook, from local rating agency PT Pefindo.
'[The company's management is] confident that these bonds will not have a significant impact on [the performance] of the company,' said one of Indofood's directors, Thomas Tjie.
On Dec. 31, 2013, Indofood had total liabilities amounting to Rp 39.7 trillion, consisting of short-term liabilities amounting to Rp 19.5 trillion and long-term liabilities amounting to Rp 20.2 trillion.
Meanwhile, the company's short-term bank loans and overdrafts amounted to Rp 4.6 trillion as of the end of last year.
Indofood's consolidated sales rose by 26.9 percent during the first quarter of this year, to Rp 16.37 trillion.
The company, however, saw its total comprehensive income for the first three months of this year plunge 22.2 percent to Rp 833.49 billion year-on-year (y-o-y), because of higher costs and foreign exchange losses.
The company also saw its net profits fall 23.2 percent to Rp 2.5 trillion last year because of higher wages and the lower average selling price of its agribusiness products, aside from higher raw material costs and foreign exchange losses. (ask)
