PTPN V will pay IDR300 billion maturing bonds

PT Perkebunan Nusantara V (Persero) plans to use a new credit facility from PT Bank Mandiri Tbk amounting to IDR300 billion to repay the maturing bond on November 12, 2010.

PTPN V is a state-owned company engaging in oil palm and rubber plantation and processing. At end-March 2010, the Company’s plantation area amounted to 160,589 hectares (ha) consisting of self owned oil palm plantation (74,575 ha), self owned rubber plantation (11,488 ha), and plasma oil palm and rubber plantations (74,526 ha).

PTPN V is currently supported by 15,329 employees, equipped with 12 palm oil mills, and 4 rubber processing-facilities. PT Pemeringkat Efek Indonesia affirmed idA rating of bond I/2003 series A & B amounting to IDR300 billion of PTPN V.

Semai Battle

The Minister of Energy and Mineral Resources and State Minister for State-owned Enterprise have different opinions on Pertamina's loss in the regular tender for oil and gas working area in Semai V, Papua.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said state oil company Pertamina's loss could be attributed to the fact the share ownership of Pertamina's partner (Shell) in the project consortium was far larger.
In Semai V, Pertamina establishes a consortium with Shell. Therefore, Hess was declared as the winner in Semai V not because Hess offered a larger bonus of US$35 million.
But, the State Ministry for State-owned Enterprise viewed technically Pertamina should win since it gave a better offer.
According to him, the Department of Energy and Mineral Resources should give priority to state-owned enterprises instead to foreign companies.

Honggo Cancels Paying IDR3.2 Trillion worth Tuban Petro's Debt

The Asset Management Company (PPA) confirms Honggo Wendratno-owned Sila Kencana Group has cancelled to pay Tuban Petrochemical Industries' (Tuban Petro) IDR3.2 trillion worth debt.
Following the cancellation, the Sila Kencana Group fails to take over a 50% stake in Tuban Petro. President Director of PT PPA Mohammad Syahrial said the settlement of the Sila Kencana Group's liabilities would therefore refer to the credit restructuring agreement signed by the group with the Indonesian Banking Restructuring Agency (BPPN).
"Honggo has cancelled to accelerate the IDR3.2 trillion worth debt payment, we will refer to the credit restructuring agreement, which says the debt payment will be made in 2014," he informed last week.
He said he didn't know the reason behind the cancellation. "I don't know. Probably, Honggo has financial problem. To be sure, the plan has been cancelled, so that the government will keep controlling Tuban Petro until 2014."
Syahrial explained after PPA completed its term by February 2009, Tuban Petro would be handled by the Department of Finance.
Previously, the Sila Kencana Group agreed to accelerate the payment of Tuban Petro's IDR3.2 trillion worth debt with the subrogation method, which would enable Honggo to replace PPA as Tuban Petro's creditor. Subrogation is the transfer of a creditor's rights to a third party.
According to the plan, after the transaction is completed the government would still control a 20% stake in Tuban Petro as part of the Tuban Petro debt restructuring agreement.
Tuban Petro controls a 59.5% stake in Trans Pacific Petrochemical Indotama (TPPI) and an 80% stake in PT Polytama Propindo. TPPI is an integrated petrochemical producer in the northern coast of Tuban, East Java.
It produces light naphtha to produce plastic, aromatic as a raw material to the textile industry, and oil fuel products. The company is able to produce 3.6 million tons of aromatic per annum.
PPA relies on the sale of Tuban Petro, which has IDR3.2 trillion in book value, to patch up its targeted contribution of IDR3 trillion to the 2008 State Budget.

Honggo Acquires a 50% Stake in Tuban Petro for IDR3.2 Trillion

The Assets Management Company (PPA) confirms Honggo Wendratno-owned Sila Kencana group will acquire a 50% stake in PT Tuban Petrochemical Industries (Tuban Petro).
The transaction will be settled under a subrogation method enabling Honggo to replace the role of PPA as Tuban Petro's creditor. Subrogation is the transfer of a creditor's rights to a third party who pays a sum of money to the creditor.
Tuban Petro controls a 59.5% stake in Trans Pacific Petrochemical Indotama (TPPI) and an 80% stake in PT Polytama Propindo. TPPI is an integrated petrochemical producer in the northern coast of Tuban, East Java. The lines of products cover light naphtha for plastic raw material, aromatic for textile raw material, and oil fuel products. It also has a capacity to produce 3.6 million tons of aromatic per year, making it the largest aromatic plant in Southeast Asia.
The transaction will be settled by the end of June this month and the realization of the transaction will raise IDR3.2 trillion in proceeds for the state.
President Director of PT PPA Mohammad Syahrial revealed the legal documentation process of the settlement was still taking place.
"Our legal process is being helped by the Deputy Attorney General for Civil and State Administrative Affairs. The Department of Finance has also approved Honggo to settle debts," he said me over last weekend.

Hashim Take Over Tuban Petro

Hashim S. Djojohadikusumo has agreed makes a bid to pay its IDR3.2 trillion in debts to get 45% stakes of PT Tuban Petrochemical Industries (Tuban Petro) from 70% shares of the government through the State Asset Management Corporation.

In the transaction takes place, the government will still own 25% shares at Tuban Petro. The rest shares will belong to Sila Kencana Lestari Group (30%) and Hashim (45%).

An executive involving in the transaction said the finalization of the documents is going on.

"If the Finance Minister agrees the transaction, the government's shares will decline from 70% to 25, and the rest will be taken over by Hashim," he said last month.

Hashim is the son of economist Prof. Soemitro Djojohadikusumo. He was known as one of Indonesia's conglomerate with various businesses. Through PT Prima Comexindo Trading, Hashim has expanded his business to Russia, Kazakhstan, Azerbaijan, and Africa since 90s.
Last year, through Nations Energy Co, Calgary based oil and gas company, Hashim sold his oil blocks as well as the mining facilities in Kazakhstan to CITIC Group of China at the price of US$1.91 billion.

The Corporate Secretary of PPA Renny O. Rorong said that the company has been reviewing the plan.

PPA owns some assets of Tuban Petro in multi-years bond of IDR3.266 trillion and mandatory convertible bond (MCB) of IDR4.167 trillion following the debt restructuring of Tirtamas Majutama.

The MCB represents the ownership of 21%-25% at PT Trans Pacific Petrochemical Indotama (TPPI). Tuban Petro owns 59.5% shares at TPPI and 80% shares at PT Polytama Propindo.
Apart from PPA, the other shareholders are Itochu Corporation (4.25%), Tuban Petrochemicals Pte Ltd (the unit of Siam Cement PCL 17%), Sojitz Corporation (4.25%) and Pertamina (15%).
TPPI produce aromatics products like paraxylene, benzene, toluene, orthoxylene at the volume of 1,065,000 tons per annum.

Another source said that Pertamina may buy the rest 25% shares of Tuban Petro from PPA.
"Based on the restructuring agreement of Tirtamas, Pertamina has the rest shares of 15% at TPPI, and it has the option to have the ownership to 25% at Tuban Petro through the scheme of rights to match.