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PLN expects to raise Rp 4.92 trillion from new bonds

The bonds, which will be officially offered to the public on Feb. 12 and 13, are to carry coupon rates of between 7.2 and 9.05 percent a year

Norman Harsono (The Jakarta Post)
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Jakarta
Mon, February 3, 2020

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PLN expects to raise Rp 4.92 trillion from new bonds Technicians of state-owned electricity company PLN replace damaged parts of the company's power distribution grid in Jakarta. (The Jakarta Post/Dhoni Setiawan)

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tate-owned electricity company PLN expects to raise about Rp 4.92 trillion (US$360.7 million)  from the issuance of new bonds later this month to improve cash flow and finance electricity infrastructure expansion.

In a statement sent to the Indonesia Stock Exchange on Friday, PLN said the new bonds would comprise five series: Series A worth Rp 540.6 billion with a five-year tenure, Series B worth Rp 672.5 billion with a seven-year tenure, Series C worth Rp 544.2 billion with a 10-year tenure, Series D worth Rp 1.46 trillion with a 15-year tenure and Series E worth Rp 1.59 trillion with a 20-year tenure.

The bonds, which are to be officially offered to the public on Feb. 12 and 13, would offer coupon rates of between 7.2 and 9.05 percent a year. The interest rates are to be higher than the average 6.65 percent offered by government bonds, but lower than those offered by the company’s bonds issued last year, which ranged between 7.9 and 9.9 percent.

PLN’s newly appointed president director, Zulkifli Zaini, said the issuance of bonds would be among several options the company has to finance the expansion of electricity networks in the country.

“As a company, we have a clear mandate that we should supply electricity to all customers, but we should also have a good financial performance,” Zulkifli said during a hearing with Commission VII of the House of Representatives on Jan. 28.

PLN, which is Indonesia's largest electricity company, has frequently issued global and domestic bonds over the past two years to patch financial problems arising from the company’s expansion projects, while keeping electricity retail prices at a minimum.

Among its global bonds were yen-denominated ones that were issued in September 2019. PLN raised about 23.2 billion yen (Rp 3 trillion) by issuing these so-called Samurai bonds.

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