Press Release: Antam will continue to make coupon payments
Thursday, August 26 2004 - 12:42 PM WIB
Antam?s wholly-owned subsidiary, Antam Finance Limited is incorporated in Mauritius. On September 30, 2003 AFL issued US$200 million worth of Eurobond Notes, guaranteed by Antam, maturing in 2010, paying a semi-annual coupon of 7.375 percent. The funds were on-lent by AFL to Antam and are being used to fund Antam?s ferronickel expansion project, FeNi III. Under the current Avoidance of a Double Taxation Agreement (DTA) between Indonesian and Mauritius, interest earned by AFL on its loan to Antam is subject to a withholding tax of 10 percent. If the DTA is cancelled as anticipated, and until a new DTA is negotiated, the withholding tax will increase to 20 percent starting January 1, 2005.
Antam wishes to confirm that it will continue to abide by its obligations to make payments to AFL so that AFL?s bond holders are not affected by any change in the tax rate as a result of the possible cancellation of the treaty. Antam is also reviewing the alternatives available to it to minimise the impact on Antam of this change.
Antam wishes to also clarify in relation to the recent re-purchase and cancellation of US$5 million of AFL Notes that it will only conduct additional buybacks of these Notes after careful consideration and if to do so is consistent with Antam?s current and future cash requirements and in light of the price of the AFL bond. (end of release)