Paper Company Owned By Conglomerate Eka Tjipta Widjaja Wants To Issue Rp3 Trillion Bonds And Rp1 Trillion Sukuk

Illustration. (Photo: Doc. Sinar Mas)

JAKARTA - PT Indah Kiat Pulp & Paper Tbk (INKP) will issue Shelf-Registered Bonds II Phase I Year 2021 worth Rp3 trillion. The bonds are part of the Shelf-Registered Public Offering (PUB) of Indah Kiat Pulp & Paper Shelf-Registered Bonds II with a target fund of Rp7 trillion.

At the same time, the company owned by the late conglomerate Eka Tjipta Widjaja will also issue a Sustainable Sukuk Mudharabah I Phase I Year 2021 worth Rp1 trillion. This bond is part of the Sustainable Sukuk Mudharabah PUB with a target fund of Rp3 trillion.

From this corporate action, Indah Kiat has the potential to reap fresh funds of Rp4 trillion. For the proceeds from the bond issuance, 60 percent will be used for debt payments in the form of loan principal, principal installments, and interest.

While the remaining 40 percent is used by issuers from the Sinar Mas group for working capital, including the purchase of raw materials, production auxiliary materials, energy and fuel, packaged goods, and overhead costs.

Meanwhile, 40 percent of the proceeds from the issuance of the mudharabah sukuk will be used for Indah Kiat's working capital. Meanwhile, 60 percent will be used for Indah Kiat's business activities to replace funds originating from debt.

Indah Kiat has held an initial bidding period on 20 August-13 September. Meanwhile, the public offering period will be held on September 27, 2021.

Indah Kiat divides the issuance of bonds into three series. Series A has a principal amount of Rp1.5 trillion. With a tenor of 370 days, Series A bonds offer a fixed interest rate of 6.75 percent.

Series B has a principal amount of Rp1.05 trillion. This 3-year bond promises an interest of 9.25 percent

While Series C, with a principal amount of Rp450 billion. The bonds with a tenor of 5 years offer an interest rate of 10 percent.