Lippo Karawaci Plans to Issue $100 Million of Global Bond

Indonesia Finance

Tuesday, 19 October 2010 22:01

Theindonesiatoday.com - Property developer PT Lippo Karawaci Tbk (LPKR) plans to issue global bonds worth US$100 million for funding its capital expenditure (capex), kontan.co.id reported today.

Danang Kemayan Jati, LPKR's communication head, said the company will propose the global bond issue to shareholders in the extraordinary general meeting scheduled for 23 November 2010.

The company had allocated capex of US$70-80 million for this year, mostly (70%) funded by bonds issuance and the rest 30% is banks' loan.

Danang said the company also plans to raise Rp2.25 trillion funds from the rights issue, making total funds to be raised, plus global bonds, to reach Rp3 trillion .

LPKR, through its unit Sigma Capital Pte. Ltd., had in May 2010 issued global bonds worth US$270.6 million, carrying annual coupon of 9%. The bonds proceeds will be used for repaying debts which mature in 2011 and funding LPKR's capex (US$70-80 million).

As of September, 2010, LPKR's bond debts totaled Rp2.94 trillion and bank loans amounted Rp504.85 billion.

Ketut Budi Wijaya, LPKR's president director, said the company needs funds of around US$1 billion for funding the expansion of hospital business within next five years.

He said the company plans to build 10-15 hospitals in 2011. The company had since July 2010 started to build two hospitals, located in Karawaci and Makassar, at a cost of around US$20 million each.

The Lippo Group had earlier said it plans to boost asset of LPKR to Rp90 trillion (US$10 billion) within next five years, a 233% increase from current Rp27 trillion (US$3 billion).

James Tjahaja Riady, chief executive officer of Lippo Group, said Lippo Karawaci targets to double number of malls to 50 from current 25 malls and to build 30 hospitals within next 3-5 years in some regions of the country.

Currently Lippo Karawaci is managing four Siloam hospitals; located in Lippo Village (Tangerang), Kebon Jeruk (JAKARTA), Cikarang (Bekasi) and Surabaya (East Java).

Lippo Karawaci will in near term manage Mochtar Riady Comprehensive Cancer Centre and Clinic Specialist, both are located in Semanggi, Jakarta. (hans@theindonesiatoday.com)

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