PLN demands a reduction in its bond collateral

State owned electricity company PLN has asked its bondholders a reduction in the guarantee or collateral of its Rp600 billion bond issued in 1997, Bisnis Indonesia reported on Tuesday.

?By placing all of PLN?s future claims as the collateral of the 1997 bonds, PLN will find no more flexibility to find collateral for other financing alternatives,? PLN?s deputy finance director Yusuf Hamdani said in Jakarta on Monday.

PLN has used its future claims worth about Rp4.5 trillion a month or Rp54 trillion a year as the collateral of its Rp600 billion bonds, which were issued in 1997.

Because some of the holders of the bonds which would mature in 2007 refused a reduction in the collateral, PLN would soon hold a meeting with all the bondholders to solve the problem, Yusuf said.

Asked about the company?s plan to issue bonds worth Rp1.5 trillion this year, Yusuf said that the issuance of the bonds was being processed. ?We hope the bonds could be available to the public in September this year,? he said. (*)