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‘Friend of State Companies’ BRI Offers $130m Facility
Yaumal Ardhi Perdana | January 16, 2012

Bank Rakyat IndonesiaPerusahaan Gas Negara’s core business is the distribution of gas, but its subsidiary PGAS Telekomunikasi Nusantara deals with fiber optic connections. (JG Photo/Jurnasyanto Sukarno) Bank Rakyat IndonesiaPerusahaan Gas Negara’s core business is the distribution of gas, but its subsidiary PGAS Telekomunikasi Nusantara deals with fiber optic connections. (JG Photo/Jurnasyanto Sukarno)
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Bank Rakyat Indonesia says it is ready to provide a non-cash loan facility to gas distributor Perusahaan Gas Negara worth $130 million in a sign of growing cooperation between the two state enterprises.

Asmawi Syam, business and institutional director at BRI, said the loan facility could be used to issue a standby letter of credit, which will be useful for PGN if it wants to secure a sales and purchase agreement with buyers.

“This loan can also be used by PGN’s subsidiaries,” Asmawi added.

The deal follows a previous arrangement between the companies that allows industry and retail customers of PGN to make payments through any of BRI’s 6,000 ATMs nationwide, the director said.

“BRI is committed to help state companies do business,” Asmawi said, adding that the bank had already provided financing help to 57 companies. These included state oil and gas company Pertamina, state telecommunications company Telekomunikasi Indonesia, state-owned pawnshop operator Pegadaian and state construction contractor Wijaya Karya.

The total value of outstanding loans to these state companies by BRI is Rp 42 trillion ($4.6 billion) in both cash and non-cash loans.

PGN’s core business is the distribution of natural gas to industrial, retail as well as residential customers. However, PGN also has a subsidiary company that is active in the telecommunications and construction sectors.

PGN owns PGAS Telekomunikasi Nusantara, which provides connection services through fiber-optic wires installed along PGN’s gas pipes from Batam to South Sumatra.

BRI’s shares fell 0.7 percent to close at Rp 3,700 and PGN’s shares lost 0.8 percent to close at Rp 3,200 on Monday trading at the Indonesia Stock Exchange.

BRI’s net income for the first nine months of 2011 rose 38 percent supported by increased loan growth, it said in October. Net income jumped to Rp 4.06 trillion, from Rp 2.95 trillion in the same period in 2010.

Outstanding loans grew 27 percent to Rp 161 trillion, surpassing the average growth in loans for Indonesian commercial lenders.

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