CMNP to build coal haul road in Sumatra
Friday, April 13 2012 - 12:43 PM WIB
"The coal deposits are huge. However, distribution remains restricted by difficult terrain," said CMNP Operational Director Hudaya Arryanto as quoted by The Jakarta Post.
CMNP expects to start construction in a period between the second half of the year and the first half of 2013.
Company business development director Daniel Reso stated that coal transportation in the region has become more difficult as local administrations forbade coal transport trucks to use commercial roads.
"Coal trucks can pass through Musi but the road have limited capacity," said Daniel, stating that the company is still consulting related coal mining companies to determine what specific infrastructure to construct.
CMNP is considering partnerships with third parties in the project. "There is also the possibility of creating a new subsidiary, for which we will look for bank loans to finance the project," said Finance Director Indrawan Soemantri.
The company also plans to issue Rp 1.2 trillion total worth of bonds in the first half of the year, consisting of Rp 700 billion in conventional bonds and Rp 500 billion in Islamic bonds (sukuk) with 5 year maturity period. Bond proceeds will be used to finance toll road infrastructure projects.
PT Indo Premier Securities, PT Sucorinvest Central Gani, PT Ciptadana Securities and PT Equator Securities had been appointed as underwriters for the bond offering.
"We have internal cash of about Rp 700 billion. We can finance a project with that cash. However, we want the company to grow, this is why the project will need more funds, obtainable from the bonds issuance," Hudaya said.
CMNP also plans to issue rights shares this year to partly support funding for the Sumatra coal-hauling project, after obtaining approval from shareholders last year to off-load 200 million new shares at a minimum price of Rp 1,200 per share this year, expecting to collect about Rp 240 billion. (*)