PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 63
22. TWO-STEP LOANS
continued The consortium of contractors consists of Sumitomo Corporation, PT NEC Nusantara Communications
and PT Humpuss Elektronika SNH Consortium. The loans were obtained to finance the second digital telephone exchange project. The loans are repayable in semi-annual installments and are due on
various dates through June 15, 2008. Two-step loans which are payable in Rupiah bear either a fixed interest rate, a floating rate based upon
the average interest rate on 3-month Certificates of Bank Indonesia during the six-months preceding the installment due date plus 1, or a floating interest rate offered by the lenders plus 5.25. Two-step
loans which are payable in foreign currencies bear either a fixed rate interest or the floating interest rate offered by the lenders, plus 0.5.
As of December 31, 2005, the Company has used all facilities under the two-step loan program and the draw-down period for the two-step loans has expired.
The Company is required to maintain financial ratios as follows: a. Projected net revenue to projected debt service ratio should exceed 1.5:1 and 1.2:1 for two-step
loans originating from World Bank and Asian Development Bank “ADB”, respectively. b. Internal financing earnings before depreciation and interest expenses should exceed 50 and
20 compared to capital expenditures for loans originating from World Bank and ADB, respectively.
As of December 31, 2005, the Company complied with the above mentioned ratios.
23. NOTES AND BONDS
2004 2005
Bonds 986,564
991,850 Medium-term Notes
1,077,703 609,329
Guaranteed Notes 736,174
- Total
2,800,441 1,601,179
Current maturities 468,976
144,510 Long-term portion
2,331,465 1,456,669
a. Bonds
On July 16, 2002, the Company issued bonds amounting to Rp1,000,000 million. The bonds were issued at par value and have a term of five years. The bonds bear interest at a fixed rate of 17 per
annum, payable quarterly beginning October 16, 2002. The bonds are traded on the Surabaya Stock Exchange and will mature on July 16, 2007. The trustee of the bonds is PT Bank Negara
Indonesia Persero Tbk and the custodian is PT Danareksa Sekuritas. Effective January 17, 2006, PT Bank Rakyat Indonesia Tbk became the trustee of the bonds replacing PT Bank Negara
Indonesia Persero Tbk.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 64
23. NOTES AND BONDS continued
a. Bonds
continued As of December 31, 2005, the rating for the bonds issued by Pefindo is AAA and by Standard and
Poor’s is BB+. As of December 31, 2004 and 2005, the outstanding principal amount of the bonds and the
unamortized bond issuance costs are as follows:
2004 2005
Principal 1,000,000
1,000,000 Bond issuance costs
13,436 8,150
Net 986,564
991,850
During the period when the bonds are outstanding, the Company is required to comply with all covenants or restrictions including maintaining consolidated financial ratios as follows:
1. Debt service coverage ratio should exceed 1.5:1
2. Debt to equity ratio should not exceed: a. 3:1 for the period of January 1, 2002 to December 31, 2002
b. 2.5:1 for the period of January 1, 2003 to December 31, 2003 c. 2:1 for the period of January 1, 2004 to the redemption date of the bonds
3. Debt to EBITDA ratio should not exceed 3:1 The Company has breached a covenant in the bonds indenture which stipulated that during the
period when the bonds are outstanding, the Company will not make any loans to or for the benefit of any person which in aggregate exceed Rp500,000 million. As of March 24, 2006, the Company
has obtained a written waiver from PT Bank Rakyat Indonesia Tbk, the trustee of the bonds, with regard to providing loans to certain subsidiaries which in aggregate exceed Rp500,000 million.
b. Medium-term Notes
On December 13, 2004, the Company entered into an agreement with PT ABN AMRO Asia Securities Indonesia, PT Bahana Securities, PT BNI Securities and PT Mandiri Sekuritas
collectively referred as “Initial Purchasers” to issue Medium-term Notes the “Notes” for a total principal amount of Rp1,125,000 million. Proceeds from issuance of the Notes were used to
finance the payment of the remaining balance of the borrowings assumed in connection with the AWI acquisition amounting to US123.0 million.
