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Railway operator KAI to raise Rp 2t bonds for new trains, facility upgrades
KAI president director Edi Sukmoro said on Monday on the sidelines of a gathering of bond investors that 672 train cars aged more than 30 years old needed to be replaced. The old train cars comprise passenger cars, freight cars, dining cars and locomotives.
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PT KAI Indonesia president director Edi Sukmoro briefed the press on Monday, Nov. 11, 2019. (JP/Riza Roidila Mufti)
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tate-owned railway operator PT Kereta Api Indonesia (KAI) will issue Rp 2 trillion (US$ 142.7 million) bonds to refinance the firm's bank loans, buy new trains and upgrade train facilities.
KAI president director Edi Sukmoro said on Monday on the sidelines of a gathering of bond investors that 672 train cars aged more than 30 years old needed to be replaced. The old train cars comprise passenger cars, freight cars, dining cars and locomotives.
"We will replace those train [cars] gradually with new ones for a better service. In terms of amenities, safety and security, many of our facilities [and] trains need to be restored indeed," he said, adding that, by 2020, all of the old train cars would be scrapped and replaced with new ones.
KAI plans to purchase new train cars from state-owned train manufacturer PT Industri Kereta Api Indonesia (Inka), opening possibilities for imported trains as well. Funds raised from the bonds issuance would also be used to buy 36 new locomotives and revitalize machines in its passenger and cargo train cars.
The firm was also eyeing the purchase of more environmentally friendly locomotives with biofuel mixes of B30 and B20, Edi added.
Around Rp 800 billion in proceeds from the bonds issuance would be used for procuring new train cars and upgrading facilities. Meanwhile, about Rp 1.2 trillion would be used for refinancing KAI’s bank loans.
“We are optimistic that our bond offering this time will be successful just like our previous bond offering,” KAI finance director Didiek Hartantyo said. KAI previously offered its first ever bonds in 2017, raising Rp 2 trillion to finance the Soekarno-Hatta International Airport train project and procure new trains. It was oversubscribed, with demand reaching Rp 5.2 trillion.
