ASEAN KEY DESTINATIONS
Indomobil seeks Rp 500b from bonds issuance
Automotive financing firm PT Indomobil Finance Indonesia is looking to raise Rp 500 billion (US$38.51 million) through a bond issuance to help boost its finances amid declining vehicle sales.
The issuance forms part of the company’s continuous bond-offering plan amounting to Rp 3 trillion over the next two years, according to Indomobil Finance president director Jusak Kertowidjojo.
“The bond issuance is part of our strategy to diversify our funding sources with better rates to manage an efficient level of cost. We have issued a total of nine bonds since 2004,” Jusak said at a press conference on Monday.
The company, part of automobile distributor Indomobil Group, is offering three series of debt papers – one-year, three-year and four-year maturities with coupon rates of 9-9.6 percent, 10-10.6 percent and 10.15-10.80 percent, respectively.
Jusak said the bond had been rated “idA” by local ratings agency Pefindo based on the company’s strengths of business synergy with Indomobil Group and its own equity as well as its asset and liability management profile.
The company appointed five securities firms as underwriters: CIMB Securities Indonesia, DBS Vickers Securities Indonesia, Indopremier Securities, Nikko Securities Indonesia and RHB OSK Securities Indonesia.
Indopremier Securities head of investment banking Rayendra Tobing said Indomobil Finance was hoping to attract both local and foreign investors during the bond-offering period, which would start on April 20 or 21.
Jusak said the proceeds from the bond issuance would be fully used to finance vehicles this year, with new financing expected to grow 15 to 20 percent higher than last year’s total of Rp 4.3 trillion. In total assets, the company booked Rp 7.7 trillion last year.
Indomobil Finance Indonesia mostly financed four-wheeled cars, with smaller stakes in motorcycles and heavy equipment, Jusak added.
As of last year, the company booked Rp 1.15 trillion in total revenue, a 22 percent increase year-on-year (yoy). Meanwhile, its net profit reached Rp 105 billion at the end of 2014, increasing 16 percent from a year earlier.
Jusak said the company was optimistic of reaching its target this year despite various macro-economic challenges that had affected Indonesia’s automotive sales and financing in the past few months.
“It is true that the ongoing rupiah depreciation and the effect of high inflation following the increase in fuel prices last year have impacted automotive sales, but actually, we haven’t seen demand decrease,” Jusak said.
Indomobil Finance Indonesia vice president director Gunawan said the company was planning to enlarge its proportion of in-group financing, or captive market business, which contributed 15 percent to its total financing as of last year.
Besides Indomobil Finance Indonesia, the Indomobil Group under publicly listed name PT Indomobil Sukses International has several other subsidiaries, including brand-holder sole agents Suzuki Indomobil Sales and Nissan Motor Indonesia, as well as heavy-equipment financing firm Swadharma Indotama Finance.
Regarding its source of funds this year, Gunawan said the company already had ongoing partnerships with several banks and planned to seek a syndicated loan if the bond issuance was successful.
“We already have a syndicated loan worth $172.5 million from a number of foreign and local banks,” Gunawan said.
In addition, Jusak said the company was currently in the process of researching new business potential in financing the maritime sector as the administration of President Joko “Jokowi” Widodo had laid out its maritime axis vision.
Starting this year, the Financial Services Authority (OJK) allows the multifinancing industry to provide loans for sectors outside the consumer, automotive and heavy equipment sectors.
“While the maritime sector offers great potential, we are still studying our options thoroughly. The national infrastructure conditions have prevented multifinancing firms from entering new markets,” Jusak said.
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