PLN to sell Rp1.5 trillion bonds

State owned electricity company PT Perusahaan Listrik Negara (PLN) will issue conventional and Islamic bonds worth a total of Rp 1.5 trillion (US$= Rp 12,300) to finance the development of transmission network for the 10,000 MW power projects.

It will issue Rp 1 trillion worth of conventional bonds and Rp 500 billion worth of Islamic bonds or sukuk. The bonds have either a tenor of five years with yields of 16.28 percent to 17.28 percent or a tenor of seven years with yields of 15.72 percent to 16.72 percent, company finance director Setio Dewo Anggoro told reporters on Tuesday.

The sukuk carried an ijarah or leasing agreement, rather than interest payment, he explained.

PLN will use the proceeds to help finance the development of transmission lines for the power plants to be built under the government's 10,000 MW program. The transmission lines projects need a total investment of Rp 10.73 trillion.

"The balance will be covered with Rp 2.4 trillion in funds from the state budget, Rp 5.5 trillion in export credits, Rp 1.33 trillion in syndicated bank loans," company vice president Rudiantara said.

PT Danareksa Sekuritas, PT Trimega Securities Tbk and PT Indo Premier Securities will act as underwriters with bookbulding scheduled from Dec. 2 through Dec. 16, 2008. The bonds are expected to be listed on the Indonesian Stock Exchange on Jan. 12, 2008. (godang)