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oll road operator Jakarta Lingkar Baratsatu (JLB), part of state-owned toll road operator Jasa Marga, is planning to raise Rp 1.3 trillion (US$89 million) in fresh funds from its first bond issuance in September.

JLB president director Fatchur Rochman said 92 percent of proceeds from the bond issuance would be used for the company’s debt refinancing program, which includes paying back loans. The rest of the proceeds, meanwhile, would go to working capital to fund its toll road maintenance, he said.

The bonds would be divided into two tenor, namely series A and series B, with maturity dates of three years and five years respectively. The coupon rate for the bonds would range from 9 to 10.5 percent.

The company will offer the bonds from Aug. 16 to 30. Meanwhile, the bond offering to the public will be held from Sept. 13 to 17 before being listed on the Indonesia Stock Exchange (IDX) on Sept. 21.

Payments for the bonds’ interest would be made every three months, starting on the date of the issuance. The first bond interest will be paid on Dec. 20, while the last will be paid on Sept. 20, 2021, for series A and Sept. 20, 2023, for series B.

Technical director Trihadi Karnanto said the company had no plans to expand its toll road portfolio in the near future using funds from the bond issuance, as it preferred to focus on maintaining existing roads.

“Our goal is to always improve service and safety; we always have to be able to maintain the [toll] roads,” Trihadi said during a public expose in Jakarta recently. “Once in five years, there will be a repaving of the toll roads. We always look up to the standards of the Indonesia Toll Road Authority (BPJT).”

Currently, JLB manages toll road networks in West Jakarta and Tangerang, namely Penjaringan-Soedijatmo; Penjaringan-Pluit; Penjaringan-Pantai Indah Kapuk (PIK); Kebon Jeruk-Penjaringan; the Kebon Jeruk section of Jakarta Outer Ring Road (JORR) W-2; and the Jakarta-Tangerang toll road.

Eleven years ago, JLB and the Public Works and Housing Ministry, representing the government, signed an agreement to develop JORR W-1, which involved Kebon Jeruk-Penjaringan, with a 35-year concession from 2007 to 2042.

The 10-kilometer JORR W-1 toll road has been operating since 2010.

In 2017, JLB showed positive growth, recording Rp 485.4 billion in income, up from Rp 443.9 billion in 2016.

The company’s net profit skyrocketed by 182.4 percent to Rp 147.7 billion last year, from Rp 52.3 billion in 2016.

JLB director Danni Hasan said the high growth in net profit was driven by an increase in traffic and road toll rates. He pointed out that the volume of vehicles accessing its toll roads grew by around 20 percent over the last 10 years.

Previously, the government planned to integrate the JORR payment system to improve efficiency and maintain toll roads. However, the plan was postponed as the public was worried it would increase toll rates.

The government said it believed the plan would eventually benefit JORR users, especially logistics companies.