Integrated energy company Indika Energy has completed the first issuance of global bonds by an Indonesian company since the beginning of the pandemic through its Singapore-based unit, Indika Energy Capital IV.
The total amount of issuance was US$675 million in two stages. On 22 October, the company issued US$450 million, and on 28 October another US$225 million. Both will mature in 2025, with interest rates of 8.25% per year.
The notes are listed on the Singapore Exchange and issued based on a double special purpose vehicle (SPV) issuance structure. Indika appointed Standard Chartered Bank (Singapore), Mandiri Securities and the Singapore branch of Deutsche Bank as joint bookrunners and initial buyers of debt securities.
Sidley advised Indika Energy, with the cross-jurisdictional team comprising partner Matthew Sheridan, counsel Alexius Chong and associates Gmeleen Tomboc and Klara Thamrin (Singapore), along with partner Nicholas Brown, counsel Carla Teodoro and associates Rémi Gagnon and Martin Michalski (New York), and partner James Crooks and associate Nils Gravenhorst (London).
The joint bookrunners were advised by Shearman & Sterling and Widyawan & Partners, Linklaters’ formal association firm in Indonesia. Shearman & Sterling’s team comprised partner Andrew Schleider and counsel Terrence R O’Donnell (Singapore), with assistance from associate Leo Wong and legal manager Ariel Chou (Hong Kong). Widyawan & Partners’ team in Jakarta was led by banking partner Adrian Pranata with support from managing associate Randy Irawan.
“We recognise the significance of this ground-breaking issuance, in the Indonesia high yield space, against the post-pandemic backdrop,” said Pranata. “We are honoured to have supported our clients on this important transaction.”
Indika Energy will use a portion of the proceeds from the offering to fund the redemption of its outstanding 6.875% senior notes due 2022, and a portion of its outstanding 6.375% senior notes due 2023. The remaining proceeds will be used to fund the expansion of its non-coal-related businesses.