Commercial & Industrial Property News Update

Indonesia - Surya Semesta Internusa To Raise Rp 700 billion Through Bond Issue


October 25, 2012

A bond issue exercise will be launched in the capital market by Surya Semesta Internusa which seeks to raise Rp 700 billion.


Property developer Surya Semesta Internusa (SSI) is seeking to raise Rp 700 billion by issuing bonds in the capital market. The bonds are expected to become available to investors next month.

SSI said that due to higher-than-expected demand from investors, the amount sought to be raised was revised upwards from its initial target of Rp 500 billion.

The bonds will be available in two formats - as three-year notes with a coupon rate of 8.3%, and as five-year notes with a coupon rate of 9.3%. SSI said that it planned to raise Rp 150 billion from the sale of the former, and another Rp 550 billion from the latter.

President director of SSI Johannes Suriadjaja said that 90% of the funds raised will be allocated to subsidiary Suryacipta Swadaya for the expansion of its industrial estates in Karawang, West Java.

Suryacipta Swadaya holds a land bank of about 1,400 ha in the area. "We are planning to undergo the second and third phases in the industrial estates development," Johannes said.

Phase two will involve the development of 524 ha of industrial estates, while phase three will see a further 386 ha being developed. Johannes explained that the development of more industrial estates as well as supporting infrastructure is being undertaken so as to tap growing demand for industrial space in Indonesia.

He added that the enhancement and addition of industrial estates would help SSI realise higher recurring income.

The company is targeting to increase its recurring income from 20% at present to 30% of total revenue over the next five years.

As part of the move, SSI will acquire a 20% stake in a 116-km toll road project connecting Cikampek and Palimanan in West Java. The deal is expected to cost Rp 800 billion.

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