Bloomberg News

Cikarang’s 2015 Note Investors Agree to Tender 93.3 Percent

February 14, 2012

(Updates with note amendment details in second paragraph.)

Feb. 13 (Bloomberg) -- Investors holding 93.3 percent of PT Cikarang Listrindo’s $300 million of 2015 bonds have agreed to tender their securities, according to a statement from the company today.

Cikarang offered to pay 110.75 cents each for the 9.25 percent notes, which will be funded by a new bond, according to a tender offer by the Indonesian power provider. Holders that didn’t agree will be left with amended notes, which allow Cikarang to increase its debt and remove limits on dividend payments. Investors couldn’t accept the buyback without agreeing to the changes.

The company started marketing a U.S. dollar bond at a yield of around 7.5 percent, according to a person familiar with the matter. The bond has a tenor of seven years and can’t be tendered in the first four, the person said, asking not to be identified as the details are private.

Some existing investors in the 2015 bond were threatening not to buy the new notes to protest Cikarang’s buyback terms. They demanded that the new securities carry a clause stipulating that any covenant amendments require authorization by 75 percent of holders.

At least 40 percent of the 2015 bondholders have agreed not to buy the proposed new notes unless these terms are met, Singapore-based Scott Bennett, head of Asian credit at Aberdeen Asset Management Plc, which owns 9 percent of the 2015 notes, said today. Bennett oversees $1.5 billion of Asian fixed-income securities.

--Editors: Beth Thomas, Greg Ahlstrand

#<459362.2794810.2.1.99.7.25># -0- Feb/13/2012 04:27 GMT

To contact the reporter on this story: Tanya Angerer in Singapore at tangerer@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net


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