PLN to double bond issue on higher demand
Thursday, December 31 2009 - 01:33 AM WIB
Earlier the company said it would issue as much as Rp 1.5 trillion bonds, comprising Rp 1 trillion in conventional bonds and Rp 500 billion in Islamic bonds or sukuk, from December to January this year.
"We have completed the book-building process and the demand is apparently over-subscribed. Thus, we expect to increase the notes to up to Rp 3 trillion," said PLN?s Finance Director Setio Anggoro Dewo Wednesday.
In an earlier statement, PLN said the conventional bonds and sukuk would both have seven and ten-year tenures. The coupon for the seven-year bonds and sukuk is based on the average coupon of the government?s bonds series FR0028 to FROO3O plus a spread of between 1.5 percent and 2.75 percent.
PLN said that about 50 percent of the funds raised from the bonds would be used to replace the internal funds used for investment in transmission and distribution in 2009 and the remainder would be used for investment in transmission and distribution in 2010.
PLN?s newly appointed President Director Dahlan Iskan said that the most urgent matter for PLN was to procure 12 new transformers for its Greater Jakarta?s system.
?All existing transformers have been used at over capacity level. A little problem at one transformer will result in blackout,? he said.
The government has said that PLN might buy the transformers without following the normal tender procedures in a bid to save time. Dahlan said PLN was waiting for a new regulation to allow this.
As the regulated electricity tariff is only between 50 to 60 percent of the market price, PLN constantly faces financial problems.
State Minister for State Enterprises Minister Mustafa Abubakar said PLN must reduce the oil-based fuels consumption at its power plants to help the company cut its production cost.
?In 2008, oil-based fuel consumption reached 35 percent (of PLN's total fuel consumption]. PLN must be able to cut this to 20 percent in 2010,? Mustafa said. (*)