PLN Plans To Meet Overseas Investors
Aloysius Unditu. The Jakarta Globe, Jakarta - 23/09/2011
State electricity company Perusahaan Listrik Negara plans to meet overseas investors next week to gauge their demand for the company’s dollar-denominated bonds.
The Jakarta-based company plans to sell $2 billion in bonds to help finance a program to provide an additional 10,000 megawatts of power by 2013.
PLN will hold meetings with potential overseas investors starting on Tuesday, the company’s finance director, Setyo Anggoro Dewo, said in statement.
The company has named Barclays Capital, Citigroup, HSBC and UBS AG to help arrange the debt sale, Setyo said.
Typically, Indonesian companies meet investors in Singapore and Hong Kong for the Asian market, London for Europe and New York for the United States.
Indonesian companies are seeking to sell bonds even amid the global financial turmoil caused by the debt crisis in Europe and a slowdown in economic growth in the United States.
Standard & Poor’s, the global ratings agency, gave PLN’s bonds a stable outlook at BB, which is a notch below investment grade and on par with the rating for Indonesia’s government bonds.
“We believe PLN’s cash flow adequacy has improved because of last year’s tariff increase, timely government subsidies and the higher creditworthiness of the government of Indonesia,’’ an S&P credit analyst, Allan Redimerio, said in a statement.
PLN is struggling to meet the national target of producing 55,484 megawatts of power by 2019 to spur economic growth. The government forecast the economy would grow 6.5 percent this year and 6.7 percent in 2012, after expanding 6.1 percent last year.
The utility has been tasked with generating 31,958 megawatts of power, with 23,525 offered to the private sector through an independent power producer scheme. The government has announced a 20,000-megawatt fast-track program that is expected to be completed by 2014.
The company needs to produce 10,000 megawatts by 2013 in the first phase, with the same amount produced by the private sector in the second phase by 2014.