"The bonds II KAI 2019 will be issued at a maximum value of Rp2 trillion," KAI President Director Edi Sukmoro noted during a press conference in Jakarta on Monday.
Related news: PT Inka maufactures 438 trains ordered by PT KAI
Proceeds from the issuance of the bonds through public offering, which will reach Rp1.2 trillion after being deducted from issue expenses, will be used to repay part of the debt principal to PT Bank HSBC Indonesia (non-affiliated) and the rest will be utilized to procure new facilities and renew facilities, he stated.
PT KAI has appointed PT Mandiri Sekuritas, PT Bahana Sekuritas, PT BCA Sekuritas, PT BNI Sekuritas, and PT Danareksa Sekuritas as the bond issue’s underwriters.
Sukmoro noted that the procurement of new facilities will mostly comprise new cars to replace old ones.
As of October 2019, the number of cars aged above 30 years had reached 672, he remarked.
The cars comprise passenger cars, restaurant cars, baggage cars, and generator cars.
Renewal of the facilities will prioritize increasing the capacity of cars, or repowering, he noted.
"The repowering entails jobs to replace the engines of passenger trains, freight cars, locomotives, diesel engine trains, and so on, to increase production capacity and improve services for both passengers and cargoes," he explained.
In the meantime, KAI Finance Director Didiek Hartantyo remarked that with a good track record and management, the projection of strong cash flow enabled KAI to earn a good bond rating.
"KAI is optimistic that the public offering would be successful as before," he noted.
Rating agency PT Pemeringkat Efek Indonesia (Pefindo) has assigned it idAAA (triple A) rating with stable outlook.
The bonds comprise series A and series B. The bonds series, due in five years, will be issued at an indicative coupon of 7.45-8.19 percent and the bonds series B, due in seven years, will be issued at an indicative coupon of 7.80-8.50 percent per year.
In the past five years, KAI witnessed its income grow, with Compound Annual Growth Rate (CAGR) reaching 25.5 percent and average net profit with CAGR grow 22.3 percent. Related news: PT KAI to conduct trial of Palembang's LRT, cut travel time
Related news: Minister of Transportation urges KAI to increase non-ticket revenue
EDITED BY INE