“The plan to issue Komodo Bond is temporary dropped because of the global factor,” he said as quoted by kontan.co.id in Jakarta on Wednesday.

Global financial market fluctuation has pushed the rupiah exchange rate down, which increases investment risk in Indonesia and also automatically increases cost of funds of bonds issuers.

Harry explained the company had not yet had alternative funding for next year as it was still in the process of finalizing capital expenditure (capex). He declined to reveal the company‘s capex for next year, but usually, it puts aside 25 percent of its revenue for capex.

Harry explained that this year, Telkom’s revenue is projected to grow by mid-high single digits (from 5 to 9 percent). If the company’s revenue grows by 5 percent, its revenue would be Rp 134.67 trillion (US$9.18 billion) and the company's capital expenditure would be Rp 33.67 trillion.

Harry said Telkom planned to issue medium term notes (MTN) worth Rp 1.5 trillion, but he stressed that it was not an alternative of the Komodo Bond because the proceeds of the MTN issuance would be used for debt reprofiling.

The issuance of MTN aimed at reducing the company’s burden of banking interests, which was projected to increase due to Bank Indonesia’s policy that increased its reference rate to 5.5 basis points, he added. (bbn)

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