Indonesia's PLN raises 2.2 trln rph from bond sales

JAKARTA, Jan 9 (Reuters) - Indonesia's state electricity firm PT Perusahaan Listrik Negara (PLN) has raised 2.2 trillion rupiah ($201 million) from conventional and Islamic bond issues, a securities firm involved in the deals said on Friday.

Indonesia's monopoly power supplier had aimed to raise 1.5 trillion rupiah from the bond issues, to help finance investment in power transmission.

It has about 24,000 MW of generating capacity but most of its plants are old, so daily output is far below capacity.

Sonny Thendian, head of trading sales at PT Indo Premier Securities, said that investors had been attracted by the high yield and potential for bond prices to rise as the central bank continued to lower interest rates.

Bank Indonesia (BI) cut its key interest rate BIPG by 50 basis points to 8.75 percent, more than expected, on January 7.

"The highest demand came from insurance firms and pension funds," said Thendian.

PT Indo Premier Securities, PT Danareksa Sekuritas, PT Trimegah Securities Tbk (TRIM.JK) were underwriters for the issues.

PLN raised 1.44 trillion rupiah from two series of fixed-rate conventional bonds. The five-year bond, maturing in 2014, has a coupon of 14.75 percent, while the seven-year bond, due 2016, has a coupon of 15 percent.

It also raised 760 billion rupiah from two series of Islamic bonds, or sukuk, which were issued under the "ijarah" or leasing arrangement.

One series, due in 2014, has a coupon of 14.75 percent, while the other series, due in 2016, has a coupon of 15 percent.

Islamic bonds do not pay interest, which is banned as usury under Islamic law, and are structured as profit-sharing or rental agreements underpinned by physical assets. ($1 = 10,950 rupiah) (Reporting by Sonya Angraini; Editing by Sara Webb)

Best Individual Islamic Banker Nomination (Islamic Finance News Poll 2008)

Achmad Riawan Amin is the president director of Bank Muamalat Indonesia (BMI) since 1999. He is also the director of International Islamic Financial Market (Bahrain), chairman of Indonesian Sharia Bank Association, and director of the General Council for Islamic Banks and Financial Institutions, Bahrain.

Achmad played an important role in reviving the bank from losses during the monetary crisis. BMI suffered losses of up to IDR105 billion (US$9.6 million), equity was only IDR39 billion (US$3.6 million), while non-performing financing drastically hiked by 65.5%.

Achmad — voted as Best CEO 2008 in Bisnis Indonesia — successfully maneuvered the bank through the difficult condition. In just the second year of his leadership, BMI reaped profits while assets hiked up to 3 times. Now BMI’s assets rose by 400 times to IDR12.6 trillion (US$1.1 billion) and total equity increased to IDR1.3 trillion (US$119 million). BMI possesses 40% of the total profit of the Shariah industry.

Innovation and alliance are Achmad’s keywords. Under his leadership, BMI has increased its outlets from a mere 58 outlets in 1998 to 222 outlets and 3,500 real time online service throughout Indonesia. BMI has an outlet operating in Malaysia. BMI’s innovative product, Shar-E, a Shariah investment was made available in every online post office all over Indonesia, possessesing 47% of the total Shariah savings account. Due to his role and service towards the development of the Shariah industry, he was awarded the Figure of Change 2008 by an author of a bestseller book ‘The Celestial Management and Satanic Finance’ published by Republika. Besides playing a vital role in the construction of the Shariah banking and Sukuk law in the country, Achmad also implemented the interconnection facility among Shariah banks via the Shariah Deposit Arrangement.