Semen Indonesia plans to raise IDR3tn from bond sale

Semen Indonesia has announced a plan to raise IDR3trn (US$225.6m) from a bond sale to refinance debt of its subsidiary PT Semen Tonasa and increase working capital, according to local press reports.

The bond, with a five-year tenure and eight per cent to 8.8 per cent annual coupon rate, is the first tranche of its planned bond issuance under the shelf registered scheme totalling IDR8trn in the next few years.

"With the optimism that the economy will be better in 2018, we have decided to issue the bond now to improve the firm's performance," finance director, Darmawan Junaidi, told the Jakarta Post.

The company also aims to double the contribution of its non-cement businesses plans to sustain profitability. Company president director, Rizkan Chandra, said the state-owned firm would enlarge its non-core businesses, such as its cement packaging unit, ready-mixed concrete business, GGBS and logistics business. They are expected to contribute a cumulative 20 per cent of the total firm's revenue, from 10 per cent currently. "We are not a cement company anymore, but rather a building material company. That's why we are looking to expand our non-cement business," the Jakarta Post quoted him as saying.