JAKARTA (Bisnis): The country's leading broadcasting company PT Rajawali Citra Televisi Indonesia (RCTI) plans to use fund earned from medium term notes (MTN) emission of IDR500 billion to finance acquisition its 30.18% share by PT Bukit Cahaya Makmur (BCM) from Rajawali Corporation. "BCM acquired 30% of RCTI share from Rajawali for IDR500 billion and financing source of which is likely to come from RCTI MTN emission. In Other words we can say that RCTI emitted the MTN to buy its own share from Rajawali," one Bisnis source said last week. BCM used the MTN emitted in July and August 2003 as bridging loan to finance acquisition of RCTI share since Rajawali demanded cash payment.

Both BCM and Rajawali is reportedly signing the agreement mid last month. Standing behind BCM is a number of investors, among others is the publicly listed company PT Bimantara Citra. The emission was initially made at only IDR100 billion but RCTI gradually make it up to IDR500 billion, precisely of the same amount for the acquisition. RCTI emitted MTN comes with annual interest of 15% to mature within three months to one year. "The earliest maturity comes in October this year while the latest in August next year," he said. Bimantara vehicle BCM is believed to be Bimantara vehicle in the acquisition that the company now is 100% owner of RCTI. Speaking at public expose on the planned RCTI bond emission worth IDR550 billion,

Bambang Hary Iswanto Tanoesoedibjo, the company President Director declined to name investor standing behind BCM for confidential agreement. Hidajat Tjandradjaja, Bimantara Vice President Director also declined mentioning the acquisition value. "You can ask about that to Rajawali." Unfortunately Yaya Winarno Junardy, Rajawali executive previously was RCTI commissioner was unavailable for comment on the issue. The source added RCTI plans to use fund from the bond emission of IDR550 billion to pay off MTN reaching IDR500 billion. "Only IDR50 billion allocated for business expansion while the IDR500 billion is intended for MTN refinancing that it could save interest payment of 1%-1.5%," he said.

Harry also declined to specify utilization of fund from the bond emission but saying that it would be used to pay off MTN emitted in July-August this year despite for investment. Bank Niaga, RCTI bond trustee, has reminded RCTI that the fund should entirely goes to MTN payment. "Otherwise its outstanding debt would double as it would have another liabilities arising from the bond despite MTN," he said. RCTI is apparently becoming Bimantara media and broadcasting sub holding as it offers more advantage than PT Media Nusantara Citra (MNC). RCTI's likely becoming 70% shareholder of Global TV late this year through conversion of bonds into share provides the clue to such an expected outcome. Through RCTI indirect acquisition of Global TV and TPI share, Bimantara would get all the way to make RCTI its media and sub holding rather than MNC. (wiw)

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JAKARTA (Bisnis): Publicly listed PT Indonesian Satellite Corporation (Indosat) asks one of covenants in Indosat I and II bonds to be eliminated following the plan to issue bonds wirth IDR1.75 trillion to support vertical merger. "The covenant proposed to be eliminated is the minimum ratio between current assets and current liabilities of 1.1:1," revealed on Bisnis source in one of the bondholders last week. The request of Indosat to eliminate the current ratio, the source said, would be asked for approval in Bondholders General Meeting (RUPO) on September 15-16, 2003. However, the source added, Indosat didn't ask for the elimination of covenants concerning the minimum 1.75:1 debt to equity ratio in the first and second bonds, including EBITDA (earning before interest, tax, depreciation, and amortization) minimum ratio and concerning the minimum loan interest rate that should be paid in 2001, 2003, dan 2004.

According to the source, the request of Indosat to eliminate the current ratio would not inflict losses on the bondholders. "The elimination will make Indosat's finance more flexible in getting new debts by issuing bonds worth IDR1.75 trillion, maximum bonds issuance of US$300 million, and rupiah-denominated bank loans," the source said. The source further disclosed that the request was normal since the current liabilities of Indosat would increase, and this would make it difficult for Indosat to meet 1.1:1 current ratio. For the bondholders, the source said, the most important thing were the payments of interest and core of the first and second bonds when they matured after the vertical merger between PT Indosat Multi Media Mobile (IM3), PT Satelit Palapa Indonesia (Satelindo), and PT Bimagraha Telekomindo. Indosat issued Indosat I bonds worth IDR1 trillion on April 12, 2001 that will mature on April 12, 2006.

It later issued Indosat II bonds worth IDR1.25 trillion on November 6, 2002 consisting of conventional bonds and shariah ones that will mature on November 6, 2007. When Bisnis asked for confirmation to Sutrisman, Indosat's director of corporate services, he confirmed there was a mini expose with the bondholders. "For detailed information, please ask Nicholas (financial director of Indosat). However, the cell phone of Nicholas Tan Kok Peng, financial director of, was inactive when Bisnis tried to reach him last weekend. The source added that besides asking for the elimination of the current ratio covenant, Indosat would also propose changes in corporate guarantee stated in the first and second bond underwriting agreements. "Indosat proposes additional cross-guarantee after the merger," the source said. The additions, the source confided, were the agreement of Satelindo to guarantee the financial liabilities of Indosat and IM3 in form of corporate guarantee; the approval of IM3 to guarantee Indosat's financial liabilities in form of corporate guarantee; and additional corporate guarantee from Satelindo to Indosat and IM3. (wiw)

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