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MAPI to issue Rp 1.5 trillion bonds to pay existing debts
Lifestyle retailer PT Mitra Adiperkasa (MAPI) plans to issue Rp 1
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ifestyle retailer PT Mitra Adiperkasa (MAPI) plans to issue Rp 1.5 trillion (US$114.8 million) worth of bonds to refinance existing debts as it aims to lower interest expenses and expand more aggressively.
MAPI intends to issue zero-coupon unsecured bonds to be subscribed by Hong Kong-based private equity firm Sportswear Holdings Pte. Ltd. and novated to PT MAP Aktif Adiperkasa (MAA) ' MAPI's wholly owned subsidiary, the company said in a statement.
'We will issue the bonds after getting approval at the shareholders meeting, which will take place in May. We estimate that we can issue the bonds by midyear,' MAPI corporate secretary Fetty Kwartati told The Jakarta Post on Tuesday.
Zero-coupon bonds do not pay interest but are traded at a discount, while unsecured bonds are not backed by any collateral.
The company would use the proceeds from the bond issuance to repay part of its debts so that it could help lower its interest-bearing debts, Fetty said.
MAPI's total liabilities hit Rp 6.08 trillion in 2014, a 13.01 percent increase from Rp 5.38 trillion in the previous year. Meanwhile, its net debt-to-equity ratio hit 1.12:1 last year, an increase from 0.9:1 in the previous year, according to the firm's financial report.
Other than planning to issue bonds, MAPI will spin off its 'active' businesses comprising sports, golf, kids, lifestyle, shoe brand Payless (under PT Putra Agung Lestari) and garment manufacturing (under PT Mitra Garindo Perkasa) and have them operate under MAA.
The spin-off is aimed at developing MAA into an independent company that can focus on unlocking the huge potential in the country's active business, particularly with many more people in the country's urban areas becoming crazy about sports.
Fetty said that her firm's active categories had so far been the only businesses directly under MAPI, adding that the firm's other businesses had been independently operated by MAPI's subsidiaries or associates.
The spin-off would also open the possibility for MAA to carry out an initial public offering in the next four to five years, where MAPI would open an option for Montage Technology Group Ltd., a subsidiary of funds advised by CVC Capital Partners, to own a 30 percent stake in MAA, she said.
