Indonesia's PNM to sell $103-M in bonds to fund expansion

Permodalan Nasional Madani plans to sell Rp 1 trillion ($103 million) worth of bonds to finance its expansion.

 President director Parman Nataatmadja said the company was aiming to disburse Rp 3.1 trillion in loans this year, up 11 percent from last year’s Rp 2.8 trillion. 

He said company officials believe that June and July were the most suitable time to issue the bonds.

Parman said the company’s financing was secure until the middle of the year, due to the raising of Rp 500 billion from the sale of units in its Limited Participation Mutual Fund. 

The company leaders said PNM would also seek between Rp 1 trillion and Rp 1.5 trillion in bank loans to meet its financing needs. The company so far has lending arrangements with 19 banks. 

PNM is now awaiting a Rp 900 billion capital injection from the national government, the owner of the company. Parman said the company was considering undertaking an initial public offering in 2015, the year following national elections. 

Parman estimated that outstanding loans grew 24.6 percent last year to Rp 2.8 trillion. PNM is now serving more than 126,000 debtors, mostly involve in the trade sector. 

The state company was founded after the 1998 financial crisis to offer microfinance loans to emerging businesses.

More than half of PNM’s loans are issued to small enterprises that need between Rp 50 million and Rp 200 million in credit. Around 35 percent of its loans are for amounts less than Rp 50 million. 

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