60 Percent Of Indah Kiat Pulp & Paper's Bonds IDR 3 Trillion, Paper Company Owned By Conglomerate Eka Tjipta Widjaja, Used To Pay Debts

JAKARTA - A company from the Sinar Mas Group, PT Indah Kiat Pulp & Paper Tbk (INKP) issued bonds and sukuk with a target of raising funds of IDR 3 trillion today, Monday 8 August. Around 60 percent of the proceeds from the offering of bonds and sukuk will be used by the company owned by the late conglomerate Eka Tjipta Widjaja for debt payments in the form of payment of loan principal, principal installments and/or interest.

The rest will be used for the company's working capital consisting of the purchase of raw materials, production auxiliary materials, energy and fuel, packaged goods, and overhead costs.

"The proceeds from the public offering of bonds are insufficient, so the shortfall will be financed by the company's internal cash flows," the company wrote in the prospectus.

INKP will issue Sustainable Bonds III Indah Kiat Pulp & Paper Phase I Year 2022 with a maximum principal amount of IDR 2 trillion.

The bonds will be offered at a value of 100 percent of the principal amount and consist of 3 series, namely Series A with a tenor of 370 days, Series B with a tenor of 3 years from the issuance date, and Series C with a term of 5 years. Coupon Series A 6.25 percent per year, series B 9.5 percent per year, and series C 10 percent per year.

Thus, the first bond interest payments will be made on November 5, 2022. Meanwhile, the last bond interest payments, as well as the maturity of the bonds, will be on August 15, 2023, for Series A bonds, August 5, 2025, for Series B bonds, and August 5, 2027, for Series C bonds.

In addition to issuing bonds, INKP will also issue and offer the Sustainable Sukuk Mudharabah II Indah Kiat Pulp & Paper Phase I in 2022 with a maximum amount of IDR 1 trillion. INKP will offer sukuk in 3 series, namely Series A with a tenor of 370 days, Series B with a tenor of 3 years, and Series C with a term of 5 years.

Revenue Sharing will be paid quarterly, according to the date of payment of Profit Sharing Revenue of Sukuk Mudharabah. The indication for profit sharing for series A is 6.25 percent, series B is 9.5 percent, and series C is 10 percent.

The first Revenue Sharing payment will be made on November 5, 2022, while the last Revenue Sharing payment will be made on the due date, namely August 15, 2023, for Series A, August 5, 2025, for Series B, and August 5, 2027, for Series C.

These bonds and sukuk have received ratings from PT Pemeringkat Efek Indonesia (Pefindo) with the respective ratings being idA+ (single A Plus) and idA+ (sy) or single A plus sharia.

INKP has appointed 6 securities companies as Implementing Underwriters (PPE), namely PT BNI Sekuritas, PT Aldira Citra Sekuritas, PT BCA Sekuritas, PT BNI Sekuritas, PT Indo Premier Sekuritas, PT Sucor Sekuritas, and PT Trimegah Sekuritas Indonesia Tbk. As for the Trustee is PT Bank KB Bukopin Tbk.