JAKARTA: PT Nippon Indosari Corpindo Tbk, the producer of Sari Roti brand bread, plans to issue bonds at less than IDR500 billion in the near future merely to finance its business expansion.A Bisnis source familiar with the issue said that the bread producer has appointed PT Mandiri Sekuritas as the underwriter.Nippon has appointed Mandiri Sekuritas to handle such bond issuance. It costs less than IDR500 billion, he told Bisnis yesterday.Regarding this issuance, the company is now in the finalization phase as it has hold talks with Mandiri Sekuritas and PT OSK Nusadana Securities, said Nippon Operating Director Yusuf Hadi.Yet, he declined to disclose the bond issuance value as it has not yet been finalized. According to him, the decision on the bonds value and the tenor will be unveiled this week.Further, Yusuf added that the proceed will be used to finance its business expansion, including the construction of three new bread factories in several areas this year.As planned, the plants will be located in Makassar and Cibitung, West Java.Each of the construction is projected to cost IDR80 billion.Indosari is owned by Salim Group and Shikishima Baking Co Ltd, Japan. The shareholders consist of Bonlight Investment Ltd (34%), Treasure East Investment Ltd (34%), Sojitz Corporation Japan (4.25%), Shikishima (8.5%) and public (19.25%).Good prospectIn the meantime, analyst at PT Nusantara Capital Securities, I Made Adi Saputra said that the to-be issued bonds have positive prospect as there has not been a listed bread producer issuing bonds this year.This is appealing for investors as majority of bonds issuers are of financial and banking sectors. With a different business portfolio, investor has other alternative to invest, he said.Made added that the bond issuance value is huge and relatively attractive. Nevertheless, most investors concern more on the bonds rating and tenor that apparently have not yet been disclosed by the company.Based on the financial report on 31 March 2011, Nippon has IDR116,6 billion current liabilities and IDR196.07 billion current assets. In the meantime, the companys debt to equity ratio (DER) was 0.3 times.Considering its financial performance, Made estimates market will positively respond the companys bond issuance. Furthermore, the proceeds will be used for business expansion, not only to settle debt.Having this balance, the company may secure A or A+ rating. I think the corporate bonds have relatively decent prospect as the company is a new listed one, building positive expectation among the investors, Made resumed. (T02/NOM)
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