Antam uses part of bond proceeds to guarantee L/C

State owned mining company PT Aneka Tambang will use around US$140 million of the $200 million cash raised from the recent offering of its bonds to guarantee its letter of credits used to purchase the equipment for the construction of its third ferronickel plant (FeNi III), Investor daily reported on Saturday.

Antam's president director Deddy Aditya Sumanegara said in Jakarta on Friday that the $140 million cash that would be used to guarantee the L/C would be placed in an escrow account at a Singaporean bank.

"There two potential banks we can use to place the escrow fund. We will decide one of them within this week," he told reporters following the presentation of Annual Report Awards at the ministry of finance.

The construction of the new smelter which will cost the company about $330 million to build will be commenced this month. Antam has allocated all of the $200 million cash raised from the bond issuance to finance the project, in addition to between $50 million and $60 million loan from local bank and its own fund of about $70 million. (*)