Bond Issuance of Express Transindo Utama for Further Business Expansion
Express Transindo Utama, the second-largest taxi operator in Indonesia (after the Blue Bird Group), targets to raise IDR 1 trillion (USD $88 million) through the issuance of three- and five-year bonds in the months ahead. Proceeds of this issuance will be used to finance further business expansion of the company, which includes the purchase of new taxi units. President Director of Express Daniel Podiman said that BCA Sekuritas, Mandiri Sekuritas and Valbury Asia Securities were appointed to assist the debt sale.
As Indonesia has been experiencing a higher interest rate environment since mid-2013 when the central bank raised the key interest rate gradually from 5.75 percent in June 2013 to 7.50 percent in November 2013, companies are more eager to tap funds from the market instead of using bank loans (which currently apply an interest rate charge of about 12 percent). However, no information was provided about details of the bond sale (including the coupon).
Express Transindo Utama aims to add 2,000 taxi units to its fleet this year. In 2013, the company already added 2,000 taxis, lifting the total number of taxis to 10,000 units.
The company posted a 67 percent increase in net profit to IDR 132.4 billion (USD $11.6 million) over 2013. Its revenue rose 32 percent to IDR 686.9 billion (USD $60.2 million) in the same period.
Further Reading:
• Company profile of Express Transindo Utama