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Tuesday, October 4, 2022

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Indah Kiat Pulp & Paper’s Sukuk: Meeting refinancing needs

Indonesian paper production company Indah Kiat Pulp & Paper (IKPP) raised IDR1 trillion (US$70.06 million) through the issuance of its Sustainable Sukuk Mudharabah I Indah Kiat Pulp & Paper Phase I Year 2021. NESSREEN TAMANO writes.

The Sukuk facility, which features three tranches, was issued alongside the company’s sustainable bonds worth IDR3 trillion (US$210.17 million), and together, the issuances were fully subscribed.

The first tranche of the Islamic paper — Series A — carried a nominal value of IDR500 billion (US$35.03 million) and a maturity date set for 10th October 2022, Series B held a nominal value of IDR449.25 billion (US$31.47 million) with a tenor of three years, and Series C had a nominal value of IDR50.75 billion (US$3.56 million) with a five-year tenor.

Proceeds from all three tranches, along with those from the sustainable bonds, will be used by IKPP to meet its refinancing needs and working capital requirements. Listed on the Indonesia Stock Exchange, the Islamic paper is rated ‘idA+(sy)’ by Pemeringkat Efek Indonesia.

The Sukuk facility marks IKPP’s first foray into Islamic issuances, having been a regular issuer of sustainable bonds since the beginning of 2020. Majority-owned by Indonesian company Sinar Mas Group (67% shareholding), IKPP is also owned by Taiwanese companies Chung Hwa Pulp International Corporation (23%) and Yuen Foung Yue Global Investment Corporation (10%).

The company went public in June 1990, entering the share market in the Jakarta Stock Exchange and Surabaya with US$326 million representing 13% of its total shares.

Indah Kiat Pulp & Paper’s Sukuk
IDR1 trillion (US$70.06 million)
30th September 2021
IssuerIndah Kiat Pulp & Paper
TrusteeBank KB Bukopin
TranchesSeries A: IDR500 billion (US$35.03 million)
Series B: IDR449.25 billion (US$31.47 million)
Series C: IDR50.75 billion (US$3.56 million)
Profit rateFloating rate
Maturity datesSeries A: 10th October 2022
Series B: 30th September 2024
Series C: 30th September 2026
UnderwritersBCA Sekuritas; BNI Sekuritas; Indo Premier Sekuritas; Maybank Sekuritas Indonesia; Sinarmas Sekuritas; Sucor Sekuritas
ListingIndonesia Stock Exchange
Rating‘idA+(sy)’ by Pemeringkat Efek Indonesia (PEFINDO)

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