Tuesday, October 3, 2023

SOEs Raise $3.6b From Global Market Amid Pandemic

Lona Olavia
May 13, 2020 | 12:54 pm
SHARE
A worker arranges aluminum ingots at an Indonesia Asahan Aluminum plant in North Sumatra. (Antara Photo/Irsan Mulyadi)
A worker arranges aluminum ingots at an Indonesia Asahan Aluminum plant in North Sumatra. (Antara Photo/Irsan Mulyadi)

Jakarta. Indonesian state-owned enterprises have raised a total of $3.6 billion from sales of dollar-denominated bonds to pay back existing debts and finance some strategic projects.

Indonesia Asahan Aluminum (Inalum), the state-owned mining holding company, has raised $2.5 billion, according to a statement from the State-Owned Enterprises Ministry on Tuesday.

Before that, state-controlled construction company Hutama Karya had raised $600 million while Bank Mandiri, the country's second-largest lender by assets, had raised $500 million. 

State-Owned Enterprises Minister Erick Thohir said Inalum's bond issuance in particular showed sustained confidence in Indonesia's economic prospects. 

Advertisement

"In general, the international community still has trust in Indonesia under [President Joko 'Jokowi' Widodo's] leadership," Erick said in a statement.

Inalum, which controls Indonesia's largest gold and copper miner Freeport Indonesia, plans to use the majority of the bond sale proceeds to refinance $1 billion worth of bonds due this year. 

Some of the proceeds would be used to fund Inalum's smelter-grade alumina refinery in Mempawah, which is capable of processing 1 million tons of alumina, or aluminum oxide, into aluminum ingots per year. 

The remainder would be used to pay for the South Sumatra Mine Mouth 8 power plant and a coal gasification plant project in Tanjung Enim, also in South Sumatra. 

Last week, Bank Mandiri's bond issuance was oversubscribed by almost five times, pushing its bidding value to $2.4 billion, mostly offers from investors in Asia, Europe and the United States.

Hutama Karya's bond issuance was also oversubscribed by nearly six times last week. The construction company plans to use the proceeds to finance the construction of the Trans Sumatra toll road. 

Inalum, Bank Mandiri and Hutama Karya have been following the government's instruction to tap liquidity in the global market as central banks in the United States, Europe and Asia ramp up buying of financial assets to stem financial turmoil caused by the coronavirus crisis. 

The Indonesian government raised $4.3 billion from issuing US dollar-denominated global bonds, including the first 50-year sovereign dollar bond in Asia, on April 7, to pay for the country's pandemic mitigation efforts. 

Tags: Keywords:
SHARE

POPULAR READS


Business 6 hours ago

KB Bukopin to Issue $20m Green Credit to EV Firm INVI

These green credits are expected to support the development of Indonesia’s EV ecosystem.
News 13 hours ago

A Riled Trump Sounds Off Outside the New York Fraud Trial

The trial could cost him control of Trump Tower and other prized properties.
News 16 hours ago

Constitutional Court Upholds Validity of Job Creation Law

In a tight decision, all nine Constitutional Court justices voted 5-4 in favor of the government.
Special Updates 16 hours ago

Bekasi Sneakers Expo Returns to Summarecon Mall Bekasi

As many as 22 tenant booths of various brands --including Wilio Indonesia, SNDRN, and Yozugoods-- joined the 2023 Bekasi Sneakers Expo.
Business 18 hours ago

ASEAN, Canada A Step Closer to Concluding Trade Deal by 2025

ASEAN and Canada are moving a step closer towards that target as both sides have recently held their fifth round of negotiations.
COPYRIGHT © 2023 JAKARTA GLOBE. ALL RIGHTS RESERVED