Mandala aims to collect Rp 1 trillion from bonds

JAKARTA. Publicly listed consumer finance company PT Mandala Multifinance (MFIN) is looking to pocket Rp 1 trillion (US$77 million) from bond issuances to boost its motorcycle-focused financing.

The first part of the issuance, worth Rp 500 billion, was announced on Thursday while the timing for the second tranche will depend on market conditions. PT BCA Sekuritas, PT CIMB Securities Indonesia and PT Indo Premier Securities have been appointed as underwriters for the offering.

The Rp 500 billion bonds will be divided into three series. The A series, with a maturity period of about one year, will offer a coupon of between 9.5 and 10 percent, while the B series, with a maturity period of about two years, offers a 10 to 11 percent coupon and the C series, which will mature in three years, offers a 10.5 to 11.5 percent coupon. The coupon would be paid quarterly.

“Proceeds from this [bond] issuance would be used to add to our capital and also to finance motorcycle loans,” Mandala Multifinance president director Harryjanto Lasmana told reporters during the kick-off of the book-building period for the bond offering that takes place from April 2 to 16 to have an overview of investors’ demand for the company’s debt papers.

The debt papers will be offered from May 4 to May 5, with the aim to list them on the Indonesia Stock Exchange on May 11. They have been rated idA by local ratings agency PT Pemeringkat Efek Indonesia (Pefindo), meaning that the issuer has a strong capacity to meet its long-term financial commitments relative to that of other Indonesian issuers.

Mandala Multifinance had Rp 5.05 trillion in outstanding financing as of the end of 2014, an increase of nearly Rp 850 billion, or 20 percent, from Rp 4.2 trillion it had in 2013. The financing was evenly distributed for new motorcycles (Rp 2.55 trillion) and used motorcycles (Rp 2.49 trillion).

The company is big on Sulawesi, with a third (33.8 percent) of its overall financing being distributed to customers on the island, followed by Java (32.1 percent), Sumatra (27.8 percent) and Kalimantan (6.3 percent).

Mandala Multifinance booked Rp 1.55 trillion in revenues last year, up more than 8 percent from Rp 1.43 trillion in the previous year, driving up net profits by 16.4 percent to Rp 301.5 billion from Rp 258.9 billion in the same period as an increase in costs also remained manageable.

Overall costs rose less than 6 percent last year to Rp 1.14 trillion from Rp 1.08 trillion in 2013, the company’s data shows.

Shares of Mandala Multifinance, which had a Rp 1.28 trillion market capitalization, traded at Rp 965 apiece on Friday’s close, down 2.53 percent from the previous day. The stocks have dropped 1.5 percent so far this year, underperforming the broader benchmark Jakarta Composite Index’s (JCI) 4.39 percent gain. (ind)