PT Tunas Baru Lampung Tbk (TBLA) plans to issue bonds of up to US$400 million or the equivalent of Rp5.642 trillion.

Quoting the company's brief prospectus published on Wednesday (10/3), the plan to issue new bonds is in line with its business development. Currently, the company is in the midst of business expansion by developing factories to increase production capacity and product diversification.

This transaction plan is an effort to increase the company's liquidity in support of operational needs, asset growth, and company funding in general.

This new bond issuance value is equivalent to 95.81% of the company's equity, which ended on December 31, 2020, reaching Rp5.88 trillion.

The company plans to use the proceeds from the issuance of these new bonds to make a buyback/repayment/payment of US$250 million 7% senior noted guarantee issued by TBLA International, which matures in 2023.

Then, pay off the company's bond debt which is part of the ongoing public offering of the sustainable bonds I Tunas Baru Lampung, with Rp1.5 trillion, which matures in 2023 and 2025, and reduce the company's short-term debt.

"With the current loan repayment plan, the company's financial liquidity is expected to be better preserved considering that the new bond issuance plan has a longer tenor than the existing bonds and credit facilities," wrote the management.