International Finance Corporation (IFC), a member of the World Bank Group, is considering arranging debt financing of up to $275 million for PT Trans Corpora, a wholly owned subsidiary of Indonesian conglomerate CT Corp.
The debt financing will be used to expand the company’s retail and tourism presence, and to strengthen its balance sheet by lengthening the maturity of some of its debt, IFC said in a disclosure.
Of the proposed debt package, IFC is looking to deploy up to $75 million through its own account. In addition, it plans to mobilise up to $106.25 million from the Hong Kong Monetary Authority in trust loans and up to $125 million from commercial lenders.
The final aggregate debt amount will be determined among all stakeholders and is slated not to exceed the total project cost of $275 million.
Trans Corpora has three subsidiaries – Trans Lifestyle, Trans Entertainment and Trans Media.
The debt financing package will be used by Trans Retail, a Trans Lifestyle subsidiary, to open new stores in under-served regions to meet the needs of the country’s fast-growing middle class. “It will expand its wholesale services for small store owners and increase its purchases of local products from many small- and medium-sized farmers and suppliers located in these regions. The company is also investing in new hotels to cater primarily to local and regional tourists,” IFC said.
Trans Retail currently operates 110 hypermarkets and supermarkets in 51 cities across the country.
IFC also noted that its financing will help the Indonesian firm extend access to modern retail, tourism and leisure infrastructure to the country’s less developed regions, thereby promoting food affordability and safety, and supporting SMEs along the retail value chain.
Trans Corpora’s parent company, CT Corp, was founded in 1987 by Chairul Tanjung. The conglomerate started as a manufacturer of footwear for export and roof tiles for the domestic housing industry. It later expanded into new businesses in the area of financial services, property and multimedia.
Last year, CT Corp set up a joint venture with US-headquartered Prudential Financial Inc to expand its life insurance business in the country. It also owns a popular online news platform, detik.com.