MNCN TO REPAY ITS USD250 MN LOAN
CEO of MNC group, Harry Tanoesoedibjo, has stated that $MNCN is currently preparing to partially mrepay its syndicated loan, which will be due in 2017, in a refinancing scheme. Deutsche Bank AG (Singapore) and Standard Chartered Bank are the mandated lead arrangers and bookrunners. 21 other banks, including PT Bank Rakyat Indonesia Tbk ($BBRI), are also involved. The loan bears an interest rate of 3.5% + 3 month LIBOR per annum and was used for MNCN’s capital expenditure and working capital.
Comment: This action would certainly not only improve MNCN’s gearing ratio but also reduce the Company’s exposure to forex volatility (In 2015, MNCN recorded a forex loss of Rp314.8 bn). We are maintaining our Buy recommendation for MNCN with a TP of Rp2,477/share.