JAKARTA. The country’s largest poultry company PT Charoen Pokphand Indonesia (CPIN) signed a syndicated loans agreement, worth the equivalent of US$400 million, with 15 international and local financial institutions in Jakarta on Monday.
The company, which is part of Thailand’s agro and food conglomerate Charoen Pokphand, said it would use the loans to secure the majority of funding needs for the company’s business expansion for the next few years as well as to support its working capital needs.
Citibank Indonesia will act as the loan’s sole mandated lead arranger.
The loan, which is the fourth syndicated loan signed by the company since the 1997 Asian financial crisis, will be disbursed in two tranches, according to the agreement.
The loans will see $200 million and Rp 2.4 trillion (US$198 million) divided into a five-year term loan facility of $75 million and Rp 900 billion as well as a five-year revolving credit facility of $125 million and Rp 1.5 trillion.
Charoen director Ong Mei Sian said the balanced portion of the loans’ currencies between US dollars and rupiah followed the company’s policy of debt portfolios to reduce interest costs while acting as a natural hedge against the volatility of the rupiah.
“The interest rate for the loan is based on LIBOR [London Interbank Offered Rate] plus 1.75 percent,” she said after the signing event.
The publicly listed firm is now a leading player in each of its business lines with 36 percent market share in poultry feed, 35 percent in day-old-chicks (DOCs) and 66 percent in processed chickens.
Ong said the company expected 10 percent growth in sales to Rp 28 trillion at the end of this year, while total revenue reached Rp 21.8 trillion during the first nine months of the year.
The company’s net profits stood at Rp 1.7 trillion as of September this year, she added.
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