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Pertamina's Elnusa issues Rp 700b in sukuk to finance business expansion
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An Elnusa employee repairs an offshore oil and gas rig. The publicly listed company is majority owned by state oil and gas giant Pertamina. (Pertamina/Pertamina)
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ublicly listed oil and gas service provider PT Elnusa, a subsidiary of state-owned oil giant Pertamina, issued Rp 700 billion (US$47.4 million) of sukuk (sharia-compliant bonds) on Wednesday to raise funds for its business expansion.
The five-year bond, which was registered at the Indonesia Stock Exchange (IDX), has a yield of 9 percent.
It was the first of several corporate actions to eventually raise Rp 1.5 trillion, which will be used to acquire more upstream-related equipment and to construct new fuel depots, as well as to secure additional working capital.
“The sukuk were oversubscribed. This is a good signal from the market for Elnusa,” said Elnusa president director Ali Mundakir in the statement on Wednesday.
Securities firm Mandiri Sekuritas, Danareksa Sekuritas, Indopremier Securities and Trimegah Securities acted as the underwriters for the bond.
The sukuk was given an Idaa-(Sy) rating – the fourth highest rung – by the Indonesian rating agency, Pemeringkat Efek Indonesia (Pefindo), with a “stable” outlook. The agency attributed the score to the company’s solid cash flow, business diversification and close relations with Pertamina.
“The rating will be lowered if the company incurs higher debt than projected to finance its business expansion plans and if we view a decline in support or ownership by its parent,” wrote Pefindo in a statement about the Rp 1.5 trillion sukuk issuance plan on June 22.
Elnusa’s rating is also at risk if the coronavirus pandemic worsens, which would further push down oil and gas demand and thus lower the company’s income, added Pefindo.
