Govt approves PLN?s plan to issue global bonds

The government has finally approved state electricity company PLN?s plan to issue global medium-term notes also known as global bonds worth US$2 billion which will be used by the company to help finance investment projects estimated to reach Rp 66.62 trillion (US$7.86 billion).

?We have just issued our approval on PLN?s $2 billion global nedium-term notes,? Minister for State Enterprises Mustafa Abubakar said in Jakarta on Friday following the shares handover of PT Pelayaran Bahtera Adhiguna state shipping company to PLN.

Mustafa said that the issuance of the global bonds would enable PLN to get funding at cheaper costs. ?If PLN gets bank loans, lending rate could reach 9 percent,? he said. But, he did not unveil the coupon yields of the global medium-term notes.

The minister said that the approval was given to PLN after seeing the encouraging performance of the company?s financial reports.

PLN?s president director said that the company?s financial reports showed an improvement thanks to an increase in the number of customers during the first half of this year. According to PLN?s data, the number of customers reached 43.8 million in the first semester, an 8 percent increase from 40.7 million, while its total revenues increased 15 percent to Rp 55.3 trillion from Rp 48.2 trillion in the same period the previous year.

?The bonds will be gradually issued until next year,? he said, adding that PLN would carry out a roadshow in September, this year in several financial centers such as Singapore, Hong Kong, London, New York and Los Angeles to promote the bonds to global investors.

?The maturity of the bonds will be 5,10 and 30 years,? he said, adding that PLN would name Citi and Barclays Capital as the underwriters of the bond offering. (*)