Berlian Tanker plan to issue US$100 million convertible bonds

PT Berlian Laju Tanker Tbk offered convertible bonds with US$100 million guarantee with 5 years tenure and 12 percent yield per year to finance investment along the enactment of cabotage tenets in Indonesia.Berlian Laju has assigned J.P. Morgan and RS Platou Markets AS to execute direct private placement of the US$100 million convertible bonds maturing in 2015.

Finance Director of Berlian Laju Kevin Wong said the convertible bonds here will be issued at 100 percent value of the outstanding value and the close bookbuilding on February 10, 2010."The bond holders will have put option executable after three years on the closing bookbuilding," he said yesterday.

The early conversion price of the convertible bonds was IDR737 (assuming US$1=IDR9,362) and conversion premium of 10 percent above the reference share price or at IDR670.If the arithmetic average of the volume average above the ordinary stock price of the corporate within 20 days of trade prior to the six months after reset reference price is lower than the conversion price, the conversion price will be adjusted down to the reset reference price."But the adjustment is on any condition not under 80 percent of the conversion price."

The corporate official statement said the convertible bonds is convertible at any time after 41 days of the closing date up through to 10 days prior to due date and will be converted into ordinary stocks listed at the IDX as corporate equity.The fund from private placement will be allotted, among the other things, for investment for the more expansive implementation of cabotage tenet in Indonesia.

Cabotage tenet is the obligation for the transportation ship owner to use Indonesian flagged ship starting from January 1, 2010."Berlian Laju is on position to get profit from long term relation involving the company and Pertamina and other oil and gas operators to get contractual additional business," said Kevin.The fund could serve as the payment or debt buyback including the floating convertible bonds which are guaranteed by the company.

Head of Debt Capital Market of PT BNI Securities Sukartono said the bond coupon of Berlian Laju is very high and thus the corporate bonds should be sold out."However, on the other hand market players questioned the very high bond coupon up to 12 percent. what is behind the very high bond coupon?" he said.

Yesterday, the BLTA stock price rose 1.49 percent into IDR680.