Mandiri Invites Two Banks to Finance Semen Gresik
Thursday, 16 November, 2006 | 12:20 WIB

TEMPO Interactive, Jakarta: PT Bank Mandiri Tbk has invited two banks to form a syndicate for financing the construction of a new factory for PT Semen Gresik Tbk.

The main consideration is that the amount of investment for the construction of the factory is large.

“Usually, we invite large banks such as BNI and BCA,” said Director of Bank Mandiri Abdul Rahman yesterday (11/15) in Jakarta.

According to him, Bank Mandiri has already presented a written offer of loans disbursement to the management of Semen Gresik.

“We have good relations with the management. We keep in touch with Pak Dwi (Dwi Soetjipto, Managing Director of Semen Gresik) and Pak Cholil (Cholil Hasan, Finance Director),” said Abdul.

He said he was optimistic that Bank Mandiri's offer will be accepted by the cement company.

Abdul said that the loans that Bank Mandiri and its syndicate prepare to disburse will be 65 percent of the total project value.

Abdul also explained that the loan scheme would take the form of long-term credit with a market rate level of around 15 percent.

“This is categorized as investment credit,” he said.

As reported, Semen Gresik has planned to build new cement factory with an investment value of around US$303 million, or Rp2.76 trillion.

It is considered to be in anticipation for the scarcity of local cement supply within the next three years due to the rise of cement consumption.

The production capacity of Semen Gresik is now almost equal with the factory's installed capacity.

Abdul said that Semen Gresik has not yet conveyed the total value of the project.

However, Bank Mandiri has allocated loans for 65 percent of the project value.

If this is calculated based on the estimated project value of US$303 million, it means Bank Mandiri will disburse loans to Semen Gresik of around US$197 million, or Rp1.8 trillion.

The management of Semen Gresik cannot yet confirm its response to the loan offer.

However, Semen Gresik's plan to build the new factory remains unclear.

The new owner of Semen Gresik—in addition to the government, there is the PT Rajawali Corporation—has asked the management to reexamine the investment.

The reason is that the project value was really large and would require further study as regards the factory type.

In addition the investment financing, said Cholil some time ago, that most of it will be from loans and the rest from internal funds.

BUDI RIZA