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PTPN III obtains US$390.6 million syndicated loan as working capital
The loan is to be used as working capital for increasing production and developing its facilities, but the company is still Rp 6 trillion short of its Rp 15 trillion funding target for 2019.
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Seger Budiarjo (third left), the acting president director of state-owned plantation holding company PTPN III, helps shovel mud at a Healthy Kampung Movement event in Jayagiri, Ciamis, West Java, in this file photo taken on April 3, 2019. (Antara/Adeng Bustomi)
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tate-owned plantation holding company PT Perkebunan Nusantara III (PTPN III) has obtained US$390.6 million in a syndicated loan from 19 international and domestic banks to finance the company’s working capital and business development.
PTPN III acting president director Seger Budiarjo said on Thursday that the company planned to use the loan to finance its working capital and boost on- and off-farm activities for its four main commodities: oil palm, rubber, tea and sugarcane.
On-farm activities included plant health maintenance, seeding and fertilization, he said, as well as replanting 4 percent of the 500,000 hectares of oil palm plantations it managed. PTPN III currently manages 1.18 million hectares of oil palm plantations across the country.
The company would also use the loan to fund improvements to its production facilities, said Seger, without specifying which facilities at which plantation or plantations.
He said that PTPN III received an initial $200 million as part of the loan commitment in June, then followed by an additional $190.6 million in August.
The company appointed Japan's Sumitomo Mitsui Banking Corporation (SMBC) and private Indonesian lender Bank Tabungan Pensiunan Negara (BTPN) as the mandated lead arranger (MLA) and the book runner, respectively. It also appointed Bank of the Philippine Islands and KEB Hana Bank as the lead arrangers.
BTPN structured finance head Rullianto Hadinoto said that the syndicated loan carried a two-year tenor under a floating scheme based on the three-month US dollar LIBOR rate.
Even though former PTPN III president director Dolly Pulungan has been named as a suspect by the Corruption Eradication Commission (KPK) in a case on alleged bribery in sugar distribution, BTPN's Rullianto said that the lender was confident in the state-owned company's governance practices as well as its business prospects.
“PTPN III has a vast land bank and it is also the biggest landholder in Indonesia and Southeast Asia,” Rullianto said on Sept. 19 during a press briefing in Jakarta.
He added that the company also had much potential in developing its plantations and palm oil derivative products like 20 percent blended biodiesel (B20), as well as its Sei Mangke special economic zone in North Sumatra.
Meanwhile, PTPN III finance director Mochammad Yudayat added that the company had raised Rp 9 trillion ($640 million) – including the syndicated loan – of the Rp 15 trillion in funding it needed this year, mostly through bank loans.
Yudayat said that the company planned to seek other means to raise the remainder of its funding target.
“We can raise the funds from other instruments such as medium-term notes, or sukuk,” he said, but did not provide any details on issuance plans.
