John Riady, chief executive of Lippo Karawaci, said the company's latest bond issuance reflects 'a very strong level of investor confidence' in the company's financial position as the largest property firm in Indonesia. (B1 Photo/Emral Firdiansyah)
Lippo Karawaci Raises $325m From Successful Bond Issuance
BY :ANSELMUS BATA
JANUARY 15, 2020
Jakarta. Lippo Karawaci, Indonesia's largest listed property company in terms of total assets and revenues, raised $325 million from the sales of dollar-denominated bonds on Tuesday as investors continued to show strong interest in the company. The proceeds from the bond sale will be used to pay off most of the company's debts due in 2022, it said on Wednesday.
The five-year bonds, which offered a yield of 8.125 percent, was oversubscribed 4.5 times. John Riady, the chief executive of Lippo Karawaci, said the bond issuance reflected "a very strong level of investor confidence" in the company's financial position as the largest property company in Indonesia.
"We will use the funds from this issuance to pay off bonds that are due in 2022," John said, adding that Lippo Karawaci is in the final stages of obtaining a loan facility to repay its remaining $100 million debt.
"That means we no longer have large debts to pay until 2025," he said.
"With a net debt-to-equity ratio of 21 percent, Lippo Karawaci has one of the lowest debt ratios among property companies in Indonesia," John said.
The five-year bonds were the twelfth issued by the company in the past 14 years, illustrating investors' confidence in Lippo Karawaci, its strong franchise and its good track record in paying debts to debtors at home and abroad.
Credit Suisse, BNP Paribas and Deutsche Bank acted as book-runners for Tuesday's bond issuance.
Lippo Karawaci had total assets of $4 billion at the end of September with core businesses comprising housing development in urban areas, lifestyle malls and health services.
Currently, Lippo Karawaci is actively involved in integrated development, hospitality, urban development and management, and asset management services.
The company's properties are spread in 35 cities across Indonesia with 1,461 hectares of landbank ready to be developed.
The company's listed subsidiaries Lippo Cikarang and Gowa Makassar Tourism Development – in which it has stakes of 81 percent and 62.7 percent respectively – develop and operate urban development in Cikarang in West Java and in Tanjung Bunga in Makassar.
In addition, Lippo Karawaci also has a 51 percent stake in Siloam International Hospitals that operates a network of leading hospitals – currently numbering 36 hospitals in 24 cities – in Indonesia.
Lippo Karawaci also owns two real estate investment trusts listed in the Singapore stock exchange: First Real Estate Investment Trust and Lippo Malls Indonesia Retail Trust. The former has assets under management of $1 billion, while the latter has $1.4 billion in assets as of September.