Pertamina delays selection of underwriters

State oil and gas Pertamina has postponed the final selection of underwriters for its planned US$500 million Eurobond issuance, a source said over the weekend.

"Pertamina is initially scheduled to appoint the underwriters next week, but it has decided to delay the appointment for a month," the source said, adding that Pertamina wanted to first finalize its change of status into a limited liability company before undertaking the selection.

Pertamina could not be asked for confirmation regarding the postponement of the tender of underwriter, Bisnis said.

According to the source, Pertamina has shortlisted six from eleven underwriters in the first phase of tender process.

The six underwriters are Credit Suisse First Boston (CSFB), Morgan Stanley, UBS Warburg, Citigroup Securities, JP Morgan Securities, and Deutsche Securities. They are scheduled to present their respective proposals next week.

Five underwriters who did not pass the selection were ING Securities, BNP Paribas, Standard Chartered Bank, HSBC Securities and ABN Amro, the source said.

Earlier, Pertamina's Finance Director Ainun Naim said the bond was expected to have a coupon rate of between 6 percent and 7,5 percent.

He claimed that during his visit recent to Singapore, Hong Kong and London, he found out that investors were interested in the company's bonds.

Ainun said funds from the bonds issuance would be used to finance several business expansion plans. The company needs around $1 billion annually for expansion. (*)