PT Indofood Sukses Makmur, the world's biggest noodle maker, said first-quarter profit rose 2
percent as higher costs of purchasing wheat countered rising sales of its Indomie noodles and La Fonte pasta in Indonesia.
Net income at the company controlled by businessman Anthoni Salim rose to 177.3 billion rupiah ($19.5 million) in the three months ended March 31, from 173.9 billion rupiah in the same
period a year earlier, the company said today in an e-mailed statement. Sales rose 18.4 percent to 5.8 trillion rupiah.
Rising prices of wheat resulted in a 20 percent increase in the cost of sales to 4.58 trillion rupiah, the company said. The average price of wheat rose 42 percent in the quarter from the
same period a year earlier on the Chicago Board of Trade.
``The rise in the price of wheat and other raw materials has put pressure on our gross margin,'' Salim said in the statement. ``The ongoing implementation of cost efficiency has continued to curb the effects'' of rising expenses.
Sales of the company's noodles, pasta and Promina baby food have been rising after Indofood started selling through more outlets. Rising incomes in Southeast Asia's biggest economy may help boosting sales and profit as Indonesians spend more on processed food.
Indofood's shares, which have risen 25 percent this year, fell 0.6 percent to 1690 rupiah in Jakarta on April 27.
Sunday, April 29, 2007
Friday, April 27, 2007
RI Has Opportunities to Drag Corruptors from Singapore ???
Big Question, are Indonesian government has opportunities to drag corruptors from Singapore
and confiscate their assets following the signing of the extradition agreement between Indonesia and Singapore this week ?????
The extradition agreement was signed on Friday (April 27, 2007) in Bali under the presences of President Susilo Bambang Yudhoyono and Singaporean Prime Minister Lee Hsien Loong.
Before there was extradition agreement, President Susilo Bambang Yudhoyono could only appeal to corruptors to return their money to Indonesia.
The road to the signing of the extradition agreement was wide open when in January 2005 the governments of both countries agreed to have a meeting at technical official level.
On the sidelines of APEC Ministerial Summit in Busan, South Korea, in 2005, Indonesia also 'urged' Singapore to realize the signing of the extradition agreement.
Separately, Minister of Foreign Affairs Hassan Wirajuda exposed there were 42 crimes included in the extradition agreement. However, he declined to provide more details as the agreement had just been signed on April 27, 2007, at Tampak Siring Palace, Bali.
So far, Indonesia has established extradition partnership with Malaysia, China, South Korea, and Australia.
Corruptor fugitives currently suspected in Singapore are, among others, Sudjiono Timan (convicted to serve 15 years in prison in BPUI fund corruption case), Bambang Soetrisno (Central Bank Liquidity Aid/BLBI of Bank Surya case), and Agus Anwar (convicted in the case of Bank Pelita's BLBI worth IDR1.98 trillion corruption). Agus is even touted to have become a Singaporean citizen.
and confiscate their assets following the signing of the extradition agreement between Indonesia and Singapore this week ?????
The extradition agreement was signed on Friday (April 27, 2007) in Bali under the presences of President Susilo Bambang Yudhoyono and Singaporean Prime Minister Lee Hsien Loong.
Before there was extradition agreement, President Susilo Bambang Yudhoyono could only appeal to corruptors to return their money to Indonesia.
The road to the signing of the extradition agreement was wide open when in January 2005 the governments of both countries agreed to have a meeting at technical official level.
On the sidelines of APEC Ministerial Summit in Busan, South Korea, in 2005, Indonesia also 'urged' Singapore to realize the signing of the extradition agreement.
Separately, Minister of Foreign Affairs Hassan Wirajuda exposed there were 42 crimes included in the extradition agreement. However, he declined to provide more details as the agreement had just been signed on April 27, 2007, at Tampak Siring Palace, Bali.
So far, Indonesia has established extradition partnership with Malaysia, China, South Korea, and Australia.
Corruptor fugitives currently suspected in Singapore are, among others, Sudjiono Timan (convicted to serve 15 years in prison in BPUI fund corruption case), Bambang Soetrisno (Central Bank Liquidity Aid/BLBI of Bank Surya case), and Agus Anwar (convicted in the case of Bank Pelita's BLBI worth IDR1.98 trillion corruption). Agus is even touted to have become a Singaporean citizen.
RI Has Opportunities to Drag Corruptors from Singapore ???
Big Question, are Indonesian government has opportunities to drag corruptors from Singapore
and confiscate their assets following the signing of the extradition agreement between Indonesia and Singapore this week ?????
The extradition agreement was signed on Friday (April 27, 2007) in Bali under the presences of President Susilo Bambang Yudhoyono and Singaporean Prime Minister Lee Hsien Loong.
Before there was extradition agreement, President Susilo Bambang Yudhoyono could only appeal to corruptors to return their money to Indonesia.
The road to the signing of the extradition agreement was wide open when in January 2005 the governments of both countries agreed to have a meeting at technical official level.
On the sidelines of APEC Ministerial Summit in Busan, South Korea, in 2005, Indonesia also 'urged' Singapore to realize the signing of the extradition agreement.
Separately, Minister of Foreign Affairs Hassan Wirajuda exposed there were 42 crimes included in the extradition agreement. However, he declined to provide more details as the agreement had just been signed on April 27, 2007, at Tampak Siring Palace, Bali.
So far, Indonesia has established extradition partnership with Malaysia, China, South Korea, and Australia.
Corruptor fugitives currently suspected in Singapore are, among others, Sudjiono Timan (convicted to serve 15 years in prison in BPUI fund corruption case), Bambang Soetrisno (Central Bank Liquidity Aid/BLBI of Bank Surya case), and Agus Anwar (convicted in the case of Bank Pelita's BLBI worth IDR1.98 trillion corruption). Agus is even touted to have become a Singaporean citizen.
and confiscate their assets following the signing of the extradition agreement between Indonesia and Singapore this week ?????
The extradition agreement was signed on Friday (April 27, 2007) in Bali under the presences of President Susilo Bambang Yudhoyono and Singaporean Prime Minister Lee Hsien Loong.
Before there was extradition agreement, President Susilo Bambang Yudhoyono could only appeal to corruptors to return their money to Indonesia.
The road to the signing of the extradition agreement was wide open when in January 2005 the governments of both countries agreed to have a meeting at technical official level.
On the sidelines of APEC Ministerial Summit in Busan, South Korea, in 2005, Indonesia also 'urged' Singapore to realize the signing of the extradition agreement.
Separately, Minister of Foreign Affairs Hassan Wirajuda exposed there were 42 crimes included in the extradition agreement. However, he declined to provide more details as the agreement had just been signed on April 27, 2007, at Tampak Siring Palace, Bali.
So far, Indonesia has established extradition partnership with Malaysia, China, South Korea, and Australia.
Corruptor fugitives currently suspected in Singapore are, among others, Sudjiono Timan (convicted to serve 15 years in prison in BPUI fund corruption case), Bambang Soetrisno (Central Bank Liquidity Aid/BLBI of Bank Surya case), and Agus Anwar (convicted in the case of Bank Pelita's BLBI worth IDR1.98 trillion corruption). Agus is even touted to have become a Singaporean citizen.
Robby Johan To Dipasena
Robby Djohan a senior bankir who motorized Fund Asia with Henro Marto will participate to bid 100% shares of PT Dipasena Citra Darmaja. Kemila, a domestic group of companies supported by Fund Asia, is participating to bid 100% shares of Dipasena along with two other investors -- PT Central Proteinaprima Tbk (CP Prima) of Charoen Pokphand Group of Thailand and a consortium of the Philippines.
Kemila got the support from Fund Asia, motorized by Robby Djohan and Hendro Marto, to finance the plasma company Dipasena. The company was also supported by bug buyers from the US, Red Chamber, and from Europe, Hotlette.
Regarding with the sale of Dipasena, PPA has been hiring Ferrer Hodgson as the financial consultant and Marsinih, Martoadmodjo Iskandar and Kusdiharjo (MMIK) as the legal consultant.
Kemila got the support from Fund Asia, motorized by Robby Djohan and Hendro Marto, to finance the plasma company Dipasena. The company was also supported by bug buyers from the US, Red Chamber, and from Europe, Hotlette.
Regarding with the sale of Dipasena, PPA has been hiring Ferrer Hodgson as the financial consultant and Marsinih, Martoadmodjo Iskandar and Kusdiharjo (MMIK) as the legal consultant.
Wednesday, April 25, 2007
Fitch Assigns 'B' Ratings to Indonesia's Indika; Outlook Stable
Fitch Ratings has today assigned Long-term Foreign and Local Currency Issuer Default Ratings (IDRs) of 'B' to PT Indika Inti Energi (Indika). The Outlook for the IDRs is Stable. At the same time, the agency has also assigned an expected issue rating of 'B' and an expected recovery rating of 'RR4' to the proposed USD250 million senior secured notes due in 2012 issued by Indo Integrated Energy B.V. and guaranteed by Indika and its 100%-owned subsidiary PT Indika Inti Corpindo. The final ratings are contingent upon receipt of documents conforming to the information already received.
The ratings reflect Indika's status as a holding company that derives a major portion of its cash flow from dividends received from its 46%-owned associate, PT Kideco Jaya Agung (Kideco), rather than from its own operations. Fitch notes that Indika is not the largest shareholder in Kideco, which is the third largest coalmining company in Indonesia, given a majority stake of 49% is owned by South Korea-based Samtan Inc. (Samtan), while the remaining 5% is held by PT Muji Inti Utama (Utama), a company unrelated to both Samtan and Indika. Kideco will not guarantee the proposed notes but Indika's shares in Kideco will be pledged as security to the noteholders. The ratings also reflect Indika's aggressive financial profile, which is characterised by high financial leverage. Even after adjusting EBITDA to include cash dividends from associates, Fitch estimates that Indika's Debt/EBITDA ratio in 2007 will be around 6x.
Fitch expects the dividend flow from Kideco to remain strong, exceeding USD15m per annum even in the stress scenario that there is no growth in the current production volume and the average selling price of coal drops to USD26 per ton from the USD31 per ton achieved in 2006. This is due to Kideco's sound operational capability under a robust Coal Contract of Work (CCOW), competitive coal mining costs, strategy of contracting out its entire production with its well-established customers and conservative financial leverage with small capital expenditure requirements. Also, the agency notes that the shareholder agreement between Samtan, Indika and Utama provides some certainty on cash dividends being up-streamed from Kideco, as it obliges Kideco to pay at least 80% of its net income as dividends.
In addition, despite its minority stake, Indika is able to influence Kideco's key decisions, including capex and financing plans, as the shareholders' agreement requires approval of at least 60% of the shareholders for these decisions (52% prior to the release of an existing pledge of Kideco shares, which is expected to occur upon the completion of the proposed notes issue and the redemption of existing debt). To further reduce the risk of dividend flow curtailment, the covenants of the proposed notes will require Indika to exercise this influence to limit the level of Kideco's external debt.
Indika also derives part of its cash flow from its 100%-owned subsidiary, Tripatra group (Tripatra), which is involved in Engineering, Procurement and Construction (EPC) and Operations and Maintenance (O&M) businesses, specifically in the oil and gas sectors. While Tripatra is a leading player in Indonesia and has had long term relationships with global oil majors, its cash flow tends to be lumpy given the volatility inherent in the businesses. Tripatra's on-going projects of USD300m, together with projects under letter of intent of USD120m, provide earnings visibility until 2008/2009 but prospects beyond that will depend on the continued robustness of the oil and gas sector in Indonesia.
Fitch also notes that while cashflows from Tripatra are available to service Indika's debt, Tripatra will not guarantee the proposed notes, nor will Indika's shares in the Tripatra entities be pledged as security to the noteholders.
Of the USD250m to be raised from the proposed notes, approximately USD60m is allocated to be used for the acquisition of a coal asset in Indonesia, around USD40m for the investment in minority stakes in power plant projects, and USD118m for refinancing existing debt. The remaining USD32m is earmarked for working capital and general corporate purposes. Fitch views that the investment risk arising from the planned debt-funded acquisitions is high, as there is significant uncertainty on the size and quality of future cash flow from these assets. The target for the coalmine acquisition has not been finalised, while the power assets are still in the development/construction stages. However, Fitch acknowledges that a successful implementation of the new investment plans, which are complementary to Indika's existing businesses, could result in greater synergies across the company's major business activities.
The Stable Outlook reflects Fitch's expectation that dividend flows from Kideco will remain steady. A positive rating action may be taken if Kideco becomes a subsidiary of Indika and/or the proposed new investments are completed and show a track record of generating returns similar to Kideco's. Conversely, a negative rating action may be taken if the dividend flow from Kideco is curtailed, the new investments produce weak returns and/or there are material adverse changes to the terms of the proposed notes.
The expected recovery rating of 'RR4' assigned to the proposed notes reflects Fitch's view that the 46% stake in Kideco, the major asset available to the noteholders in the event of default by Indika, will likely provide a recovery rate exceeding 30% of the value of its outstanding debt. This threshold may be achieved even if Kideco's reserves of relatively higher calorific value of 243 million tons as at end 2006 are valued at a distressed level of USD1.25 per ton.
Indika, established in 2000, is a privately-owned investment holding company. Its major investment assets include a 46% stake in Kideco and a 100% stake in Tripatra. Kideco, the major cash flow provider to the holding company, commenced its commercial operations in 1993, with a 30 year CCOW valid until 2023. The CCOW, which is structured as a contract between Kideco and the Indonesian government and ratified by the Indonesian Parliament, will prevail above other Indonesian laws and also provide for international arbitration in the event of a dispute. Fitch notes that this framework has existed for nearly 25 years, and has withstood considerable political and economic turmoil in Indonesia. Tripatra is a leading EPC and O&M service provider in Indonesia with a focus on energy and infrastructure projects.
The ratings reflect Indika's status as a holding company that derives a major portion of its cash flow from dividends received from its 46%-owned associate, PT Kideco Jaya Agung (Kideco), rather than from its own operations. Fitch notes that Indika is not the largest shareholder in Kideco, which is the third largest coalmining company in Indonesia, given a majority stake of 49% is owned by South Korea-based Samtan Inc. (Samtan), while the remaining 5% is held by PT Muji Inti Utama (Utama), a company unrelated to both Samtan and Indika. Kideco will not guarantee the proposed notes but Indika's shares in Kideco will be pledged as security to the noteholders. The ratings also reflect Indika's aggressive financial profile, which is characterised by high financial leverage. Even after adjusting EBITDA to include cash dividends from associates, Fitch estimates that Indika's Debt/EBITDA ratio in 2007 will be around 6x.
Fitch expects the dividend flow from Kideco to remain strong, exceeding USD15m per annum even in the stress scenario that there is no growth in the current production volume and the average selling price of coal drops to USD26 per ton from the USD31 per ton achieved in 2006. This is due to Kideco's sound operational capability under a robust Coal Contract of Work (CCOW), competitive coal mining costs, strategy of contracting out its entire production with its well-established customers and conservative financial leverage with small capital expenditure requirements. Also, the agency notes that the shareholder agreement between Samtan, Indika and Utama provides some certainty on cash dividends being up-streamed from Kideco, as it obliges Kideco to pay at least 80% of its net income as dividends.
In addition, despite its minority stake, Indika is able to influence Kideco's key decisions, including capex and financing plans, as the shareholders' agreement requires approval of at least 60% of the shareholders for these decisions (52% prior to the release of an existing pledge of Kideco shares, which is expected to occur upon the completion of the proposed notes issue and the redemption of existing debt). To further reduce the risk of dividend flow curtailment, the covenants of the proposed notes will require Indika to exercise this influence to limit the level of Kideco's external debt.
Indika also derives part of its cash flow from its 100%-owned subsidiary, Tripatra group (Tripatra), which is involved in Engineering, Procurement and Construction (EPC) and Operations and Maintenance (O&M) businesses, specifically in the oil and gas sectors. While Tripatra is a leading player in Indonesia and has had long term relationships with global oil majors, its cash flow tends to be lumpy given the volatility inherent in the businesses. Tripatra's on-going projects of USD300m, together with projects under letter of intent of USD120m, provide earnings visibility until 2008/2009 but prospects beyond that will depend on the continued robustness of the oil and gas sector in Indonesia.
Fitch also notes that while cashflows from Tripatra are available to service Indika's debt, Tripatra will not guarantee the proposed notes, nor will Indika's shares in the Tripatra entities be pledged as security to the noteholders.
Of the USD250m to be raised from the proposed notes, approximately USD60m is allocated to be used for the acquisition of a coal asset in Indonesia, around USD40m for the investment in minority stakes in power plant projects, and USD118m for refinancing existing debt. The remaining USD32m is earmarked for working capital and general corporate purposes. Fitch views that the investment risk arising from the planned debt-funded acquisitions is high, as there is significant uncertainty on the size and quality of future cash flow from these assets. The target for the coalmine acquisition has not been finalised, while the power assets are still in the development/construction stages. However, Fitch acknowledges that a successful implementation of the new investment plans, which are complementary to Indika's existing businesses, could result in greater synergies across the company's major business activities.
The Stable Outlook reflects Fitch's expectation that dividend flows from Kideco will remain steady. A positive rating action may be taken if Kideco becomes a subsidiary of Indika and/or the proposed new investments are completed and show a track record of generating returns similar to Kideco's. Conversely, a negative rating action may be taken if the dividend flow from Kideco is curtailed, the new investments produce weak returns and/or there are material adverse changes to the terms of the proposed notes.
The expected recovery rating of 'RR4' assigned to the proposed notes reflects Fitch's view that the 46% stake in Kideco, the major asset available to the noteholders in the event of default by Indika, will likely provide a recovery rate exceeding 30% of the value of its outstanding debt. This threshold may be achieved even if Kideco's reserves of relatively higher calorific value of 243 million tons as at end 2006 are valued at a distressed level of USD1.25 per ton.
Indika, established in 2000, is a privately-owned investment holding company. Its major investment assets include a 46% stake in Kideco and a 100% stake in Tripatra. Kideco, the major cash flow provider to the holding company, commenced its commercial operations in 1993, with a 30 year CCOW valid until 2023. The CCOW, which is structured as a contract between Kideco and the Indonesian government and ratified by the Indonesian Parliament, will prevail above other Indonesian laws and also provide for international arbitration in the event of a dispute. Fitch notes that this framework has existed for nearly 25 years, and has withstood considerable political and economic turmoil in Indonesia. Tripatra is a leading EPC and O&M service provider in Indonesia with a focus on energy and infrastructure projects.
Monday, April 23, 2007
Kiani to Offer Stocks in IPO
PT Kiani Kertas has planned to offer some stocks through initial public offering (IPO) as the company's financial condition has been better.
The President Commissioner of Kiani Kertas Luhut Binsar Pandjaitan said the financial condition of the company has been better due to the capital injection by Hashim S. Djojohadikusumo, the brother of Prabowo Subianto, the owner of the paper manufacturing company.
Prabowo Subianto owns Kiani Kertas through PT Fayola Investment Limited (99.99%) and PT Metra Tujuh Dua owns 0.01% stakes. The company has repaid as much as US$47 million debt to Bank Mandiri in some payments this year.
"We plan to offer the shares of Kiani but we have to wait for the improvement on financial condition as well as on operational side. We are now focusing to repay the debt to Bank Mandiri in November this year at the latest," he told me last week.
He said the company also has repaid the debt to United Fiber System of Singapore so that the debt pressure has been lighter. UFS has disbursed US$45 million to help Kiani Kertas. "We have repaid the debt to IFS."
Hashim injected his money in return to get 50% ownership at the company. Kiani Kertas is with the production capacity of 525,000 metric tons per annum.
Luhut added the company has planned to expand they production capacity. "We will use single mill system and we will gradually increase the capacity."
Bank Mandiri's Director Riswinandi said the debt repayment of Kiani was under the scheme of refinancing.
"If they ask for some credit to Bank Mandiri, we will see the track record of the debtor," he told me last week.
He said that the debt of Kiani Kertas at Bank Mandiri has been performed as in January 10 the company has repaid US$37 million loan. "At present the company's obligation to Bank Mandiri is US$170 million, and the company will settle it on 2007."
Previously Hashim has planned to takeover 45% shares of PT Tuban Petrochemical Industries (Tuban Petro) of 70% shares of the government through the State Assets Management Company at IDR3.2 trillion.
If the transaction happens, the government will have 25% stakes at Tuban Petro. The rest stakes of the company belong to Kencana Lestari Group and Hashin at 30% and 45% respectively.
But Hashim has cancelled the plan. Hashim is the son of the late noted Indonesian economist Prof. Soemitro Djojohadikusumo. The 52 years old man is known as one of Indonesia's present conglomerates.
Through PT Prima Comexindo Trading, Hashim owns some business in Russia, Kazakhtan, Azerbaijan, and Africa. Last year, through Nations Energy Co, an oil and gas company based in Calgary of Canada, Hashim sold some oil and gas mining and some other facilities in Kazaks to CITIC Group of China at US$1.91 billion.
The President Commissioner of Kiani Kertas Luhut Binsar Pandjaitan said the financial condition of the company has been better due to the capital injection by Hashim S. Djojohadikusumo, the brother of Prabowo Subianto, the owner of the paper manufacturing company.
Prabowo Subianto owns Kiani Kertas through PT Fayola Investment Limited (99.99%) and PT Metra Tujuh Dua owns 0.01% stakes. The company has repaid as much as US$47 million debt to Bank Mandiri in some payments this year.
"We plan to offer the shares of Kiani but we have to wait for the improvement on financial condition as well as on operational side. We are now focusing to repay the debt to Bank Mandiri in November this year at the latest," he told me last week.
He said the company also has repaid the debt to United Fiber System of Singapore so that the debt pressure has been lighter. UFS has disbursed US$45 million to help Kiani Kertas. "We have repaid the debt to IFS."
Hashim injected his money in return to get 50% ownership at the company. Kiani Kertas is with the production capacity of 525,000 metric tons per annum.
Luhut added the company has planned to expand they production capacity. "We will use single mill system and we will gradually increase the capacity."
Bank Mandiri's Director Riswinandi said the debt repayment of Kiani was under the scheme of refinancing.
"If they ask for some credit to Bank Mandiri, we will see the track record of the debtor," he told me last week.
He said that the debt of Kiani Kertas at Bank Mandiri has been performed as in January 10 the company has repaid US$37 million loan. "At present the company's obligation to Bank Mandiri is US$170 million, and the company will settle it on 2007."
Previously Hashim has planned to takeover 45% shares of PT Tuban Petrochemical Industries (Tuban Petro) of 70% shares of the government through the State Assets Management Company at IDR3.2 trillion.
If the transaction happens, the government will have 25% stakes at Tuban Petro. The rest stakes of the company belong to Kencana Lestari Group and Hashin at 30% and 45% respectively.
But Hashim has cancelled the plan. Hashim is the son of the late noted Indonesian economist Prof. Soemitro Djojohadikusumo. The 52 years old man is known as one of Indonesia's present conglomerates.
Through PT Prima Comexindo Trading, Hashim owns some business in Russia, Kazakhtan, Azerbaijan, and Africa. Last year, through Nations Energy Co, an oil and gas company based in Calgary of Canada, Hashim sold some oil and gas mining and some other facilities in Kazaks to CITIC Group of China at US$1.91 billion.
Fitch Assigns 'BB-' Rating to Indonesia's Berlian Laju Tanker; Outlook Stable
Fitch Ratings has today assigned Long-term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) of 'BB-' (BB minus) to Indonesia-based PT Berlian Laju Tanker Tbk (BLT). The Outlook for the ratings is Stable. Fitch has also assigned an expected rating of 'BB-' (BB minus) to the proposed USD200 million senior unsecured notes due 2014 to be issued by BLT Finance B.V. and guaranteed by BLT. The final ratings are contingent upon receipt of documents conforming to information already received.
BLT's ratings are supported by its leading position as the largest shipping company in Indonesia, established track record and its ability to remain profitable through industry downturns. In addition, due to its younger, more modern fleet with an average fleet age of 10.6 years, it is able to meet increasingly stringent industry regulations, providing it an edge over some of its peers. The young fleet age also means that in times of distress, BLT may be able to fetch higher resale prices for its vessels, thereby increasing financial flexibility. Fitch also recognises that BLT benefits from an experienced senior management team with all team members having spent at least eight years in BLT and most of them at least ten years in the shipping industry.
However, BLT's ratings are constrained by the cyclical, competitive and fragmented nature of its key business, liquid bulk cargo shipping. Although based in Indonesia, BLT derives around 85% of its revenues from outside the country, primarily the intra-Asian market. In all three segments that BLT operates in - chemical, oil, and gas tankers - contracts are typically priced off industry benchmarks, the levels of which are determined by overall supply and demand dynamics. In the chemical tanker segment, which contributed to 52% of its total revenue in 2006, BLT is one of the largest players in Asia, both by tonnage and by number of ships, but its market position does not appear to provide it enhanced pricing powers. BLT's size, however, allows it to bid for larger contracts such as those from multinationals and regional trading companies.
In addition, the contribution from the inherently more volatile spot contracts - as opposed to the somewhat more long-term contracts of affreightment (COA) and time charters - increased to 51% of the company's total revenue in 2006 from 27% in 2003. Fitch notes that this strategy was adopted to boost the company's profits given the remarkable rise in spot rates during these years. BLT also intends to continue relying on spot rates for around 50% of its revenue. Although this balance allows BLT the flexibility to benefit from any further increases in spot rates, predictability of earnings and operating cash flow is lower. However, the reliance on COAs and time charters for at least 50% of revenue is viewed positively as it not only reduces revenue volatility, but also somewhat insulates BLT from any further rise in bunker costs. This is because the COAs typically include bunker adjustment clauses while the charterer bears the full bunker costs in the case of time charters.
BLT's ratings are also constrained by its aggressive capital expenditure program. The company spent USD615m since 2003 to increase its fleet capacity by 260% to 1.52m deadweight tons (DWT) as at end 2006. Although the expansion resulted in improved earnings and operating cash flow given the high utilisation rates, BLT has persistently generated negative free cash flow due to the scale of the capex. This trend is unlikely to change in the near term as the company plans to spend approximately an additional USD500m in the next three years for building new vessels and acquiring second-hand ships, thereby increasing its fleet capacity in terms of DWTs by around 50%.
Despite some equity injection in the past, the fleet expansion has resulted in moderately high financial leverage, as reflected by the 3.3x net adjusted debt/EBITDAR ratio registered in 2006. Fitch estimates that following the planned debt issuance of USD400m, including the proposed notes, the ratio will rise to 4.2x in 2007, but is likely to be reduced after that. However, the increased operating cash flow contribution from the existing and new vessels is expected to enable interest coverage to remain moderately strong, with the FFO/gross interest expense ratio staying above 4x.
The Stable Outlook reflects Fitch's expectation that BLT will continue to generate positive operating cash flow at least in line with its 2006 performance, and reduce its financial leverage. A sustained reduction in operating cash flow and/or an increase in debt-funded capex beyond the planned levels may result in a negative rating action. The demonstration of an ability to generate positive free cash flow and sustain low levels of financial leverage through an industry downturn may result in a positive rating action.
The ratings have also taken into account BLT's intention to prepay about USD180m of secured ship loans this year. Without the prepayment, secured debt as a percentage of total debt will remain high at about 48%. Thus, negative rating actions on the IDR and the expected issue rating may be taken if the prepayment is not completed as planned in 2007.
BLT is the largest Indonesian shipping company, focusing on liquid bulk cargo, with operations primarily in Asia with some expansion into the Middle East and Europe. In 2006, BLT achieved revenue of USD335m, EBITDA of USD154m and net income of USD107m. The founder, Mr Hadi Surya, has a 48.7% beneficial interest in BLT.
BLT's ratings are supported by its leading position as the largest shipping company in Indonesia, established track record and its ability to remain profitable through industry downturns. In addition, due to its younger, more modern fleet with an average fleet age of 10.6 years, it is able to meet increasingly stringent industry regulations, providing it an edge over some of its peers. The young fleet age also means that in times of distress, BLT may be able to fetch higher resale prices for its vessels, thereby increasing financial flexibility. Fitch also recognises that BLT benefits from an experienced senior management team with all team members having spent at least eight years in BLT and most of them at least ten years in the shipping industry.
However, BLT's ratings are constrained by the cyclical, competitive and fragmented nature of its key business, liquid bulk cargo shipping. Although based in Indonesia, BLT derives around 85% of its revenues from outside the country, primarily the intra-Asian market. In all three segments that BLT operates in - chemical, oil, and gas tankers - contracts are typically priced off industry benchmarks, the levels of which are determined by overall supply and demand dynamics. In the chemical tanker segment, which contributed to 52% of its total revenue in 2006, BLT is one of the largest players in Asia, both by tonnage and by number of ships, but its market position does not appear to provide it enhanced pricing powers. BLT's size, however, allows it to bid for larger contracts such as those from multinationals and regional trading companies.
In addition, the contribution from the inherently more volatile spot contracts - as opposed to the somewhat more long-term contracts of affreightment (COA) and time charters - increased to 51% of the company's total revenue in 2006 from 27% in 2003. Fitch notes that this strategy was adopted to boost the company's profits given the remarkable rise in spot rates during these years. BLT also intends to continue relying on spot rates for around 50% of its revenue. Although this balance allows BLT the flexibility to benefit from any further increases in spot rates, predictability of earnings and operating cash flow is lower. However, the reliance on COAs and time charters for at least 50% of revenue is viewed positively as it not only reduces revenue volatility, but also somewhat insulates BLT from any further rise in bunker costs. This is because the COAs typically include bunker adjustment clauses while the charterer bears the full bunker costs in the case of time charters.
BLT's ratings are also constrained by its aggressive capital expenditure program. The company spent USD615m since 2003 to increase its fleet capacity by 260% to 1.52m deadweight tons (DWT) as at end 2006. Although the expansion resulted in improved earnings and operating cash flow given the high utilisation rates, BLT has persistently generated negative free cash flow due to the scale of the capex. This trend is unlikely to change in the near term as the company plans to spend approximately an additional USD500m in the next three years for building new vessels and acquiring second-hand ships, thereby increasing its fleet capacity in terms of DWTs by around 50%.
Despite some equity injection in the past, the fleet expansion has resulted in moderately high financial leverage, as reflected by the 3.3x net adjusted debt/EBITDAR ratio registered in 2006. Fitch estimates that following the planned debt issuance of USD400m, including the proposed notes, the ratio will rise to 4.2x in 2007, but is likely to be reduced after that. However, the increased operating cash flow contribution from the existing and new vessels is expected to enable interest coverage to remain moderately strong, with the FFO/gross interest expense ratio staying above 4x.
The Stable Outlook reflects Fitch's expectation that BLT will continue to generate positive operating cash flow at least in line with its 2006 performance, and reduce its financial leverage. A sustained reduction in operating cash flow and/or an increase in debt-funded capex beyond the planned levels may result in a negative rating action. The demonstration of an ability to generate positive free cash flow and sustain low levels of financial leverage through an industry downturn may result in a positive rating action.
The ratings have also taken into account BLT's intention to prepay about USD180m of secured ship loans this year. Without the prepayment, secured debt as a percentage of total debt will remain high at about 48%. Thus, negative rating actions on the IDR and the expected issue rating may be taken if the prepayment is not completed as planned in 2007.
BLT is the largest Indonesian shipping company, focusing on liquid bulk cargo, with operations primarily in Asia with some expansion into the Middle East and Europe. In 2006, BLT achieved revenue of USD335m, EBITDA of USD154m and net income of USD107m. The founder, Mr Hadi Surya, has a 48.7% beneficial interest in BLT.
Sunday, April 22, 2007
BLTA to Issue US$200 Million Bonds
PT Berlian Laju Tanker Tbk (BLTA) will issue US$200 million of senior bonds with the tenor of seven years.
The Finance Director of BLTA Kevin Wong said the company has assigned Deutsche Bank and JP Morgan as the arrangers. "We will conduct road show next week," he said in a statement to Singapore Stock Exchange last week.
The Finance Manager of BLTA Chrisnanto Tedjaprawira added that the company will use the cash to buy some ships and to refinance its debts. "We are still calculating the amount [of the debt]."
Before issuing the bonds, Berlian has got the bridging loan from JP Morgan Securities and Deutsche Bank. The company plans to refinance the bridging loans using the cash from the bonds issuance.
Chrisnanto said to me that he did not know on whether the company will increase the bonds if the demand exceeding the offering.
He said the company will offer the bonds in some countries. "We don't know yet about the schedule and the location, but Singapore and Hong Kong are in our list."
The company, with the transaction code of BLTA, has a total of 59 ships with the total capacity of 1.53 million tons, consisting of 36 units of chemical tanker, 16 units of oil tanker, six units of gas tanker, one unit of floating production and storage offloading
The Finance Director of BLTA Kevin Wong said the company has assigned Deutsche Bank and JP Morgan as the arrangers. "We will conduct road show next week," he said in a statement to Singapore Stock Exchange last week.
The Finance Manager of BLTA Chrisnanto Tedjaprawira added that the company will use the cash to buy some ships and to refinance its debts. "We are still calculating the amount [of the debt]."
Before issuing the bonds, Berlian has got the bridging loan from JP Morgan Securities and Deutsche Bank. The company plans to refinance the bridging loans using the cash from the bonds issuance.
Chrisnanto said to me that he did not know on whether the company will increase the bonds if the demand exceeding the offering.
He said the company will offer the bonds in some countries. "We don't know yet about the schedule and the location, but Singapore and Hong Kong are in our list."
The company, with the transaction code of BLTA, has a total of 59 ships with the total capacity of 1.53 million tons, consisting of 36 units of chemical tanker, 16 units of oil tanker, six units of gas tanker, one unit of floating production and storage offloading
Tuesday, April 17, 2007
Bakrie Telecom to Issue IDR500 Billion Bonds
PT Bakrie Telecom Tbk has planned to issue IDR500 billion bonds. The company has assigned Danatama Makmur as the underwriter. At present the syndication of local and international banks are competing to provide IDR110 million to Bakrie Telecom.
The company is searching for US$220 million debt. Half of the debt has been provided by its vendors, Huawei and Nortel.
The company has planed to expand its capacity so that it may serve 4.2 million customers. Bakrie Telecom sets aside the capital expenditure of IDR2 trillion this year, an increase of 74% from last year's allocation of IDR1.15 trillion. The company has increased the capital expenditure as it has got the license to operate nationally.
The company is searching for US$220 million debt. Half of the debt has been provided by its vendors, Huawei and Nortel.
The company has planed to expand its capacity so that it may serve 4.2 million customers. Bakrie Telecom sets aside the capital expenditure of IDR2 trillion this year, an increase of 74% from last year's allocation of IDR1.15 trillion. The company has increased the capital expenditure as it has got the license to operate nationally.
Monday, April 16, 2007
Hashim Buy 50% Share Kiani
Hashim Djojohadikusumo Buy 50% share PT Kiani Kertas. Commissioner Kiani Luhut Binsar Pandjaitan told me that Hashim execute the transaction.
Subianto had planned to sell Kiani Kertas to investors to raise funds to repay an overdue bank loan of more than $200 million. The plan was canceled after brother Hashim Djojohadikusumo.
United Fiber System, a Singapore-based forestry company, said in September it planned to buy Kiani Kertas, with DBS Group Holdings Ltd. helping to raise the funds for the transaction.
Subianto had planned to sell Kiani Kertas to investors to raise funds to repay an overdue bank loan of more than $200 million. The plan was canceled after brother Hashim Djojohadikusumo.
United Fiber System, a Singapore-based forestry company, said in September it planned to buy Kiani Kertas, with DBS Group Holdings Ltd. helping to raise the funds for the transaction.
The state elecPLN has assigned PT Danareksa Sekuritas, PT Bahana Securities, PT Mandiri Sekuritas, and PT Trimegah Securities Tbk
The state electricity company PT PLN has assigned PT Danareksa Sekuritas, PT Bahana Securities, PT Mandiri Sekuritas, and PT Trimegah Securities Tbk as the underwriter for its IDR3 trillion bonds.
Sunday, April 15, 2007
Jasa Marga Asks Underwriter to Provide Bid Bonds
PT Jasa Marga has asked for the bid bonds of IDR20 billion for the underwriter of the issuance of the IDR1 trillion bonds of the company so that they will meet their commitment.
Jasa Marga will take the bid bond if Bahana Securities is unable to meet the commitment of the bond price. For the underwriter, it will be a problem if it is unable to meet the commitment, while the bonds market is also fluctuating amid the strict market competition.
As the market condition has kept changing, the underwriter could miss the commitment
Jasa Marga will take the bid bond if Bahana Securities is unable to meet the commitment of the bond price. For the underwriter, it will be a problem if it is unable to meet the commitment, while the bonds market is also fluctuating amid the strict market competition.
As the market condition has kept changing, the underwriter could miss the commitment
PLN Assign Four Securities Company to Arrange Bonds
My Source told me that PLN have assign four securities company to arrangge IDR 3 trilion bond. Who ? Wait tomorrow
Six security companies have been fighting to become the underwriter for the issuance of IDR3 trillion bonds of the state owned electricity company PT PLN.
The six short-listed companies are PT Danareksa Sekuritas, PT Mandiri Sekuritas, PT Indo Premier Securities, PT Bahana Securities, PT Andalan Artha Advisindo and PT Trimegah Securities Tbk.
Six security companies have been fighting to become the underwriter for the issuance of IDR3 trillion bonds of the state owned electricity company PT PLN.
The six short-listed companies are PT Danareksa Sekuritas, PT Mandiri Sekuritas, PT Indo Premier Securities, PT Bahana Securities, PT Andalan Artha Advisindo and PT Trimegah Securities Tbk.
Friday, April 6, 2007
Bahana FA for Garuda
PT Mandiri Sekuritas, PT Bahana Securities, PT Danareksa Sekuritas, PT Trimegah Securities and Ernst & Young are fighting to become the financial advisor of Garuda Indonesia on its plan to sell 49% of its states.
Some investors said they are interested in investing in Garuda. Rajawali Group is among the investors. Lufthansa Airlines (Germany), Air Canada, Thai Airways (Thailand), and Texas Pacific Group have been reportedly in cooperation with Rajawali.
Garuda is searching for US$1 billion to operate 25 units of Boeing 737-800 NG (Next Generation) starting May 2009. Garuda has signed the contract with Boeing Co and has paid US$23 million.
The company also has planned to renovate nine units of its aircrafts at the cost of US$6 million per unit.
Some investors said they are interested in investing in Garuda. Rajawali Group is among the investors. Lufthansa Airlines (Germany), Air Canada, Thai Airways (Thailand), and Texas Pacific Group have been reportedly in cooperation with Rajawali.
Garuda is searching for US$1 billion to operate 25 units of Boeing 737-800 NG (Next Generation) starting May 2009. Garuda has signed the contract with Boeing Co and has paid US$23 million.
The company also has planned to renovate nine units of its aircrafts at the cost of US$6 million per unit.
Monday, April 2, 2007
Tata Power to Borrow Up to 70% of Indonesian Spending
India's Tata Power Co., which bought into two of Indonesia's biggest coal mines for $1.1 billion,
said it will finance as much as 70 percent of the investment through debt.
Tata Power, the nation's second-biggest utility by sales, will raise some of the funds overseas.
Tata Power on March 31 agreed to buy 30 percent of two units of PT Bumi Resources, Indonesia's largest coal miner.
Ratan Tata, the chairman of Tata Power, is expanding the group's 96 companies, which control about 3 percent of India's $854 billion economy, to build a global brand and spread
investment risks. Shares of Bumi fell on concern the company sold the stake at a lower-than-expected price.
The price for the stakes in PT Kaltim Prima Coal and PT Arutmin Indonesia excludes working capital and other adjustments amounting to at least $200 million.
said it will finance as much as 70 percent of the investment through debt.
Tata Power, the nation's second-biggest utility by sales, will raise some of the funds overseas.
Tata Power on March 31 agreed to buy 30 percent of two units of PT Bumi Resources, Indonesia's largest coal miner.
Ratan Tata, the chairman of Tata Power, is expanding the group's 96 companies, which control about 3 percent of India's $854 billion economy, to build a global brand and spread
investment risks. Shares of Bumi fell on concern the company sold the stake at a lower-than-expected price.
The price for the stakes in PT Kaltim Prima Coal and PT Arutmin Indonesia excludes working capital and other adjustments amounting to at least $200 million.
Sunday, April 1, 2007
Tata Power to Buy Bumi Mines Stake for $1.3 Billion
Tata Power Co., India's second-biggest utility by sales, agreed to pay $1.3 billion for a 30 percent stake of two coal mining units in Indonesia to secure supplies of the fuel.
PT Bumi Resources, Asia's third-largest coal miner, will sell stakes in PT Kaltim Prima Coal and PT Arutmin Indonesia.
Chairman Ratan Tata is expanding the group's 96 companies, which control about 3 percent share of India's $854 billion economy, to build a global brand and spread investment risks.
Tata Power's acquisition comes with an entitlement to purchase 10 million metric tons of coal from one of the mines, securing supplies of the fuel for its power plants coming up on
India's west coast. The new plants are part of Tata Power's $4 billion expansion plan to double power generation capacity to more than 4,500 megawatts.
Tata Power will pay $1.1 billion for Bumi's units ``prior to working capital and other adjustments,'' the company said in a statement from Mumbai.
Asian thermal coal prices have risen on supply constraints and higher demand from China. Chinese thermal coal imports rose by 28 percent year-on-year in January, the Beijing-based
Customs General Administration said Feb. 28.
The Kaltim Prima mines are 50 kilometers (31 miles) north of the equator on the east coast of Kalimantan, in Indonesian Borneo. The mines hold 3.56 billion tons of coal reserves,
according to the company's Web site. Arutmin operates four open-pit mines in the southeastern portion of Kalimantan.
Tata Power shares have declined 11 percent on the Bombay Stock Exchange in the past year, even as the benchmark Sensitive stock index gained 16 percent during the period.
The Tata group has spent almost $14 billion in the past two years to acquire companies overseas. Flagship company Tata Steel Ltd. this month completed a US$12 billion takeover of U.K. steelmaker Corus Group Plc, catapulting the company up world rankings to become the sixth-largest steelmaker, from 56th.
The group's previous overseas acquisitions include Tata Steel's purchase of Singapore's Natsteel Ltd. in August 2004 for 13 billion rupees ($287 million), and Thailand's Millennium
Steel Pcl for 18.2 billion rupees in December 2005.
Tata Tea Ltd. bought the U.K.'s Tetley Group Plc for $407 million in 2000 and followed it with a $677 million purchase of a 30 percent stake in U.S.-based Energy Brands Inc., also known as Glaceau. The group's hotels unit, Indian Hotels Co., last year bought the Ritz-Carlton hotel in Boston for $170 million.
Tata Power beat six other bidders, including India's Reliance Energy Ltd., to buy the stake. Bumi decided to sell part of its stake in the coal mines after it failed to raise
$3.2 billion through a share sale last year.
Coal miners in Indonesia, which in 2005 overtook Australia as the world's biggest exporter of coal used in power stations, are benefiting as economic growth in China boosts demand for coal to generate electricity.
PT Bumi Resources, Asia's third-largest coal miner, will sell stakes in PT Kaltim Prima Coal and PT Arutmin Indonesia.
Chairman Ratan Tata is expanding the group's 96 companies, which control about 3 percent share of India's $854 billion economy, to build a global brand and spread investment risks.
Tata Power's acquisition comes with an entitlement to purchase 10 million metric tons of coal from one of the mines, securing supplies of the fuel for its power plants coming up on
India's west coast. The new plants are part of Tata Power's $4 billion expansion plan to double power generation capacity to more than 4,500 megawatts.
Tata Power will pay $1.1 billion for Bumi's units ``prior to working capital and other adjustments,'' the company said in a statement from Mumbai.
Asian thermal coal prices have risen on supply constraints and higher demand from China. Chinese thermal coal imports rose by 28 percent year-on-year in January, the Beijing-based
Customs General Administration said Feb. 28.
The Kaltim Prima mines are 50 kilometers (31 miles) north of the equator on the east coast of Kalimantan, in Indonesian Borneo. The mines hold 3.56 billion tons of coal reserves,
according to the company's Web site. Arutmin operates four open-pit mines in the southeastern portion of Kalimantan.
Tata Power shares have declined 11 percent on the Bombay Stock Exchange in the past year, even as the benchmark Sensitive stock index gained 16 percent during the period.
The Tata group has spent almost $14 billion in the past two years to acquire companies overseas. Flagship company Tata Steel Ltd. this month completed a US$12 billion takeover of U.K. steelmaker Corus Group Plc, catapulting the company up world rankings to become the sixth-largest steelmaker, from 56th.
The group's previous overseas acquisitions include Tata Steel's purchase of Singapore's Natsteel Ltd. in August 2004 for 13 billion rupees ($287 million), and Thailand's Millennium
Steel Pcl for 18.2 billion rupees in December 2005.
Tata Tea Ltd. bought the U.K.'s Tetley Group Plc for $407 million in 2000 and followed it with a $677 million purchase of a 30 percent stake in U.S.-based Energy Brands Inc., also known as Glaceau. The group's hotels unit, Indian Hotels Co., last year bought the Ritz-Carlton hotel in Boston for $170 million.
Tata Power beat six other bidders, including India's Reliance Energy Ltd., to buy the stake. Bumi decided to sell part of its stake in the coal mines after it failed to raise
$3.2 billion through a share sale last year.
Coal miners in Indonesia, which in 2005 overtook Australia as the world's biggest exporter of coal used in power stations, are benefiting as economic growth in China boosts demand for coal to generate electricity.
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