Indonesia Dealbook: Bakrie raises $75m via bonds, Astra unit to close $3.2b loan

Visual from the company page. October 2015

One of Indonesia’s largest conglomerate groups, PT Bakrie & Brothers Tbk (BNBR), has announced plans to raise Rp990.6 billion ($74.9 million) via a mandatory convertible bond. While PT United Tractors Tbk (UNTR), a unit of Astra International Group, is ready to close a project loan worth $3.2 billion from eight foreign banks.

Repaying debts

In a statement, Bakrie & Brothers said it intends to issue a five-year mandatory convertible bond worth Rp990.6 billion to repay debts to five creditors. The five lenders are Daley Capital Limited, Interventures Capital Pte Ltd, Smart TreasuresLimited, Harus Capital Limited, and PT Maybank Kim Eng Securities.

“The transaction will be executed at a price of Rp 50 each, without coupon or any special guarantee. To proceed with this plan, we will ask the shareholder approval on June 2, 2016,” Bakrie & Brothers management said on Tuesday.

The bonds will be converted into Bakrie & Brothers’s 19.8 billion new shares – or about 17.45 per cent of the enlarged capital – with the conversion carried out through a non-preemptive rights issue mechanism.

The management said the transaction is expected to strengthen the company’s capital structure, reducing debt burden and financial cost, which in turn will boost profits and cash flow.

Bakrie & Brothers pocketed Rp 4.6 trillion of revenue last year, a 26.8 drop from the same period in 2014 of Rp 6.37 trillion. In line with the revenue slump, the company also recorded a net loss of Rp 1.75 trillion.

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UT consortium loan

In another deal, heavy equipment company United Tractors, a member of Tanjung Jati steam-powered plant project consortium, is ready to close a loan agreement worth $3.2 billion with eight foreign banks. United Tractors holds 25 per cent of the $4.2 billion project, along with Kansai Electric (25 per cent) and Sumitomo Corp (50 per cent).

Finance Director of United Tractors Iwan Hadiantoro said the loans will be provided by six Japanese banks and two French banks. A large portion of it – about 50 per cent – will be granted by Japan Bank For International Cooperation (JBIC).

“This financial closing is essential for us to begin construction. In the meantime, the consortium had taken care of the land clearing,” said Hadiantoro, as quoted by local media.

The 2,000-megawatt Tanjut Jati power plant in Central Java would be United Tractor’s largest project to date. The company has also secured a power purchasing agreement with state utility company PLN for the duration of 25 years.

In 2015, United Tractors recorded consolidated net revenue Rp49.3 trillion or 7 per cent lower compared to Rp53.1 trillion in 2014. The fall of coal price has led the company to assess the carrying value of its coal mining properties and other related assets.

The net impact of the impairment loss charged to profit after tax was Rp2.6 trillion (2014: Rp1.5 trillion).

These factors have led to a decrease in company’s net profit, which was recorded at Rp3.9 trillion, down 28% from Rp5.4 trillion in 2014. Excluding the impact of  impairment loss recorded in relation to coal mining properties and other related assets, the company recorded net income of Rp6.4 trillion or 7 per cent lower.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.