Antam raises local loans to finance bond redemption

State-owned mining company PT Aneka Tambang Tbk will raise U.S. dollar-denominated loans from Bank Mandiri and Bank Central Asia (BCA) to finance early redemption of the company's bonds worth up to US$171 million, Investor Daily reported Tuesday.

Antam's finance director Kurniadi Atmosasmito said in Jakarta Monday that the company would raise loans of about US$50 million from Bank Mandiri and another US$71 million from BCA.

"The remainders will be paid with our internal funds," he told reporters following the signing of memorandum of understanding (MoU) with the Jakarta Commodities Bourse. He said that the lending rate of the five years loan will be floated at 1.5 percentage points above the Singapore Inter Bank Offered Rate (Sibor).

Kurniadi said that the bonds which would mature in 2010 would be paid earlier following the removal of the Avoidance of Double Taxation Agreement between Indonesia and Mauritius in 2004.

The bonds were offered by Antam's Mauritius-based subsidiary Antam Finance Limited in 2003 to finance the construction of the company's third refinery plant (FeNi III). The decision on the early redemption has been made only recently to take advantage of lower interest rates. (*)