PGEO management is reluctant to report to the authorities regarding claims of excessive demand for green bonds

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Report by AMPONTOONS.COM reporter Danang Triatmojo

AMPONTOONS.COM, JAKARTA – PT Pertamina Geothermal Energy Tbk (PGEO) management said it has issued $400 million worth of green bonds.

The issuance value of this green bond is also said to have experienced oversubscription of up to 8.25 times or a value of $3.3 billion.

However, management does not feel the need to report the results of the issuance of these foreign debt securities to the self-regulatory organization (SRO), be it the Financial Services Authority (OJK), the Indonesian Stock Exchange (IDX) or the Indonesian Central Securities Depository (KSEI) in the form of transparency.

“This process is not material information that we are required to report to regulators in the form of an information disclosure,” Pertamina Geothermal Energy chief financial officer Nelwin Adriansyah said some time ago.

Previously, the problem of excess demand for PGEO green bonds arose from anonymous investing.

Read also: Capital market watchers hope PGEO is transparent about green bond issuance abroad

Various groups, including the DPR, observers and analysts of the capital markets then responded to the statement of the anonymous investment banker.

Rumors of excess demand for PGEO green bond issuance emerged after the Pertamina subsidiary cut its issuance target from $600-800 million to just $400 million.

Although the excess demand is said to reach 8.25 times to reach 3.3 billion US dollars.

Capital market observer Fendy Susianto said PGEO management should file an official notification to shareholders, including the public and authorities, even if the green bonds were issued overseas.

“Considering that this is material information that may affect the value and movement of PGEO shares, it should have been announced as a form of disclosure,” Fendy said on Friday (19/5/2023).

Read also: Oversubscribed PGEO Green Bond Supply, What Do Analysts See?

“In my opinion there should be an official announcement as an obligation of the issuer, even if the green bonds are outside the Indonesian area,” he explained.

FYI, PGEO is issuing green bonds outside the territory of Indonesia in the amount of US$400 million or about IDR6 trillion at an interest rate of 5.15% per annum maturing in 2028.

PGEO will use the proceeds from the bond issue to pay off all of its short-term debt of US$600 million due June 23, 2023.

Meanwhile, PGEO’s balance sheet as of December 31, 2022 had a negative working capital balance of $424,475. Negative working capital indicates that the company’s current debt is greater than its current assets.

At the same time, it was recorded that PGEO’s total debt reached US$943.28 million, consisting of long-term bank loans after deducting the portion due within one year to the value of US$327.7 million.

Meanwhile, the company’s short-term or current debt was reported at US$615.58 million.

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