JAKARTA, NNC - In order to repay loans from eight banks and bond debt maturing in mid-2019, PT Intiland Development Tbk (IDX:DILD) decided to receive a syndicated credit facility worth IDR2.8 trillion from PT Bank Negara Indonesia (Persero) Tbk (IDX:BBNI) and PT Bank Central Asia Tbk (IDX:BBCA).
DILD's Director of Capital Management and Investment Archied Noto Pradono said that the syndicated credit facility has an eight-year tenor originating from BBNI amounting to IDR1.63 trillion and BBCA IDR1.17 trillion at an interest rate of 10.5 percent.
"The disbursement of this syndicated credit facility has a positive impact on Intiland to execute strategic plans and strengthen the financial structure and improve business performance," Archied said in Jakarta, Thursday (01/31/2019).
Archied said this funding facility is an investment credit for refinancing and increasing working capital. According to the plan, he said, DILD will allocate a large portion of the loan disbursement to refinancing loans to eight banks and pay off bond debt due in mid-2019.
He revealed currently Intiland has loans to a number of banks with various interest rates and tenors. Thus, he added, this condition causes the debt management model less efficient in terms of the cost of funds and the administrative process.
Archied further said the refinancing step through repayment of these debts could reduce the interest expense, simplify the administrative process and improve the financial structure of DILD.
"By getting a longer loan tenor, of course we have more free space to regulate the financial structure and funding for business development," he said.
He explained the total bank loans refinanced amounted to IDR2.16 trillion, repayment of bonds worth IDR428 billion and for working capital around IDR221.67 billion.
As is known, in 2016 DILD issued Bond II worth IDR590 billion which were divided into two series. Series A bond was worth IDR428 billion with an interest rate of 10.75 percent and a tenor of three years. The Series B bond has a five-year tenor worth IDR168 billion with a coupon of 11 percent.
"Series A bond will mature on June 29, 2019. Now the funds from the credit facility are ready, just wait for payment at maturity," Archied concluded.