Jakarta. Modern Internasional, the company behind convenience store chain 7-Eleven, plans to raise S$150 million ($111.32 million) from issuing global bonds this year or next in an effort to ease the burden of its debt interest payments.

The company will allocate 70 percent of the proceeds to its refinancing plans, Modern Internasional finance director Donny Sutanto said on Wednesday.

Shareholders have agreed to issue global bonds with a maximum interest rate of 10 percent per year.

“We just have to wait for the CIMB Niaga’s written agreement as the creditor. We have got one from Standard Chartered. We can issue the bond this year or next year. We need to review our needs and the interest rate conditions first,” Donny said.

Danny conceded that bank interest payment has curbed company profit despite an increase in revenue.

The company booked Rp 1.4 trillion ($105 million) in revenue in last year, up 13 percent from Rp 1.2 trillion in the previous year. Net income, however, fell to Rp 39.6 billion, down 27 percent from Rp 50.1 billion in 2013.

“We have been using bank loans to fund the company’s expansion. With the bonds, we can use the funds now and pay them off later when they’re due,” Donny said.

Investor Daily

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Source: The Jakarta Globe