Timah Tbk (TINS) will issue Shelf Registered Bond I Phase I 2017 and Shelf Registered Sukuk I Phase I 2017 with a total of IDR 1.5 trillion. The company will use the proceeds to finance capital expenditure (capex) and short-term debt refinancing.
Andi Sidharta, Director of Bahana Sekuritas, underwriter of TINS, said conventional bonds and sukuk in phase I were issued IDR 1.2 trillion and IDR 300 billion respectively. This issuance is part of secondary public offering worth IDR 2.8 trillion.
“Conventional bonds are issued in two series: Serial A with 8.5 to nine percent coupon rate and three-year tenor and Serial B with 8.75 to 9.25 percent coupon rate and five-year tenor,” said Andi. The sukuk is also issued in two series with the same return and tenor as conventional bonds.
M Riza Pahlevi Tabrani, President Director of TINS, said that 70 percent of the proceeds will be used for capex procurement (KIP), marine mining vessels, procurement of ausmelt and fuming equipment, exploration and opening of large mines. The remaining 30 percent is to pay off short-term debt in the form of working capital loans.
“We are facing a challenge with the potential for alluvial tin reserves and the shallow sea that is running low, therefore we need a ship that can reach the tin reserves in the deep ocean,” said Riza.
The company is also planning to acquire a new tin mine outside Bangka-Belitung. This mine expansion will be announced before the end of this year. TINS is expecting tin production at 30,000 to 33,000 tons with a projected price of USD 19,000 to USD 121,000 per ton.
Emil Ermindra, Finance Director of TINS, said that from the company’s capital expenditure plan amounting to IDR 2.3 trillion, its realization until June 2017 reached 40 percent or IDR 920 billion. The company is optimistic that the bond issuance will support the company’s development and performance this year.
The bookbuilding will be held on August 24 to September 6, 2017. The public offering is expected is expected to be carried out by September 20, 22 and 25 2017 and listed in Indonesia Stock Exchange on October 2, 2017. (*)