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Indonesia's Para Group eyes $350
Million Global Bond
April 16, 2008
By Janeman Latul and Andreas Ismar
JAKARTA, April 16 (Reuters) -
Indonesia's Para Group, which has banking
and media interests, said on Friday it aims
to raise more than $350 million from a
global bond this year to pay for a stake in
French retailer Carrefour SA's local unit.
Chairul Tanjung, founder of Para Group, said
proceeds from the bond would be used to
finance the acquisition of a 40 percent
stake in PT Carrefour Indonesia, the local
unit of international retailing giant
Carrefour. The deal was announced on
Thursday.
Tanjung said Para Group will pay $300
million-$400 million for the stake,
initially using a $350 million bridging loan
from Credit Suisse, Citibank, ING Bank and
JP Morgan.
The four banks have also been appointed to
underwrite the bond issue, proceeds of which
will be used to repay the bridging loan.
"We received a total $350 million of loans
from a consortium consisting of Credit
Suisse, Citibank, JP Morgan and ING. The
funds were used to finance the acquisition,"
Tanjung told reporters.
"The loan was a bridging loan with a period
of 18 months. So hopefully the global bond
issue would be higher than $350 million. The
proceeds will be used to repay debts and
business expansion."
Tanjung, who trained as a dentist before he
went into business, founded Para Group,
which has interests in banking through
Indonesia's mid-sized listed lender Bank
Mega. It also owns media unit Trans Media,
theme parks, and retail businesses.
Tanjung said the French retailer looked for
a local partner after it ran into problems
in Indonesia.
"They've had several problems. And after
they assessed (the situation) they tried to
find local businessmen to help out. They
then short-listed local businessmen, from
20, to 10, and eventually the Para Group,"
he said.
Earlier this year, Carrefour Indonesia won
its appeal against Indonesia's anti-monopoly
commission which had ordered it to sell its
stake in a local firm.
The anti-trust unit, the KPPU, had ruled
that Carrefour breached competition laws by
using its market dominance to extract bigger
discounts from suppliers.
Carrefour Indonesia has about 80 stores in
22 cities across the archipelago and plans
to open 13 new stores in 2010.
It competes with Lippo Group's Hypermarket
and with retail firm PT Hero Supermarket.
(Editing by Sara Webb and Rupert Winchester)
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