Indika bonds oversubscribed six times amid rising coal price
Saturday, November 4 2017 - 02:25 AM WIB
Petromindo|Dasir
Bonds worth US$575 million issued by IDX-listed energy and coal mining firm PT Indika Energy Tbk were oversubscribed by up to six times amid renewed interest in the coal mining sector in the wake of recent recovery in the price of the commodity.
Proceeds from the seven-year bonds with coupon rate of 5.875 percent will be used to help finance the acquisition of another 45 percent stake in coal miner PT Kideco Jaya Agung, which will allow Indika to control 91 percent of the coal firm.
According to the company, during book building process, demand from investors in Asia, Europe, US, the Middle East and Africa for the bonds totaled US$3.5 billion, or oversubscribed by 6.1 times.
President and CEO of Indika Arsjad Rasjid said that the high demand for the 2024 bonds is proof of the confidence of the global investment community to the company?s acquisition strategy.
He expected the aquisition of Kideco could be completed in November of this year.
Coupon rate of the 2024 bonds is far the lowest among bonds issued by Indonesian coal miners. This is also the second bond issuance by Indika this year, which previously issued 2022 bonds with coupon rate 1 percent higher than the 2024 bonds. (*)