Astra Subsidiary FIF Aims to Raise Up to $232m With String of Bond Sales
Jakarta. Federal International Finance, a unit of Indonesia’s biggest automotive distributor Astra International, plans to sell between Rp 2 trillion and Rp 3 trillion ($154.6 million-$232 million) worth of bonds within the next two months to help finance expansion, a FIF executive said Monday.
The upcoming bond sale is part of the financing firm’s larger plan to sell up to Rp 10 trillion worth of bonds through multiple sales.
FIF head of treasury and funding Jerry Fandy said the company will first observe market conditions before offering the bonds to investors.
“If the interest rate is promising, we will offer [bonds] again in the second half next year,” Jerry told Investor Daily.
In addition to raising capital through bond sales, FIF will also seek further funding from bank loans.
Last year, the company secured $335 million from foreign lenders. The cash reserve will be used to help fund its automotive financing division, for which the company has set a target of Rp 28 trillion, up from Rp 26 trillion in 2014.
A majority of FIF’s business comes from the financing of motorcycle purchases, particularly Honda motorbikes sold by Astra Honda Motor, a 50-50 joint venture between Astra International and Honda Motor Company.
The company also aims to offer financing services to retailers.
“We will try to tap the retail market, because the prospects are hug,” said FIF president director Suhartono.
FIF has also drawn up plans to enter the interior design sector by collaborating with electronics companies and offering clients to chance to furnish their dwellings with various electronic devices.
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Source: The Jakarta Globe