Holcim Indonesia to Seek $175m Bank Loan

Byrebecca3360

Updated Thu, 29 May 2014 15:31:07 GMT

Jakarta - Cement producer Holcim Indonesia will seek $175 million in bank loans to refinance its debt and fund working capital, a director at the company said last week.

Finance director Kent Carson said the company has Rp 1.15 trillion ($98.9 million) in debt that will mature in November this year.

This debt is part of a $195.7 million loan from Swiss parent company Holcim.

“The value of the loan has yet to be finalized, but the range will be at around $175 million,” Carson told Investor Daily last week. The paper did not name the lenders.

According to Holcim’s first-quarter financial report, the company’s total debts reached Rp 6.53 trillion, while total equity stood at Rp 9.07 trillion.

This makes the company’s debt to equity ratio at 0.71 times, a relatively low ratio and suggest it has room to borrow more.

The company will also use part of the loan to help finance the expansion of its a cement plant in Tuban, East Java.

The completed first phase of the new plant, with a production capacity of 1.7 million metric tons, has started commercial operation in October last year.

The second plant at Tuban, which is already under construction, is scheduled to become operational in the first quarter of next year.

Holcim Indonesia announced in a brief prospectus on Investor Daily on Tuesday that its plan to merge two of its subsidiaries will proceed, with the legal merger to take place on June 30.

Holcim plans to get approval for the merger at its annual shareholders’ meeting on June 2.

The company plans to merge its two subsidiaries Bintang Polindo Perkasa and Wahana Transtama, — both cement makers — as it seek to streamline Holcim’s assets and improve efficiencies.

Bintang Polindo Perkasa, fully owned by Holcim, owns cement milling facilities with a 600,000-ton capacity in Ciwandan, Banten.

Wahana Transtama, also fully owned by Holcim, has been inactive since 2006.

Holcim produced 9.5 million tons of cement last year and it is targeting to add 3.4 million tons of capacity by 2015, once the two plants in Tuban in operational.

Holcim has announced a plan to expand its network in Sumatra with a silo terminal in Lampung, West Sumatra.

Due to increasing demand, it also plans a threefold expansion of its Greenzone project, an industrial waste recycling plant in Narogong, West Java, this year.

Holcim booked a net income of Rp 323.67 billion in first quarter of this year and sales jumped to Rp 2.35 trillion.