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China Hongyang Group, is an integrated enterprise with the research & development, production and marketing of Fuel Dispenser and related accessories as well as service station concerning equipments. It concentrates on the relative manufacture & services of filling station such as Hongyang tax control Fuel dispenser, IC Card fuel dispenser, manage system of network for stations, submerge pump and liquid level devise. China Hongyang Group, designed supplier of SinoPec and PetrolChina, our HONGYANG products have been sold to over 50 countries in South-east Asia, Mid-east, Africa, Europe and well received in their markets.
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r. It earned $4m last year and has a market
capitalisation on the Jakarta Stock Exchange of $106m. Like other developers, it has a thirst for capital
and no qualms about borrowing. It is also subject to the risks common to all issuers in Indonesia.
According to its bond prospectus, these include social unrest (violent and non-violent); insurrection;
earthquakes and active volcanoes; and “various bombing incidents directed towards the government and
foreign governments and public and commercial buildings frequented by foreigners� including the stock
e fuel dispenser xchange and the airport.
But the acid test of creditors appetite for risk was a new
danger also spelled out in several places in the prospectus. In
November, secured creditors in a $500m bond sold in the mid-
1990s by a subsidiary of Asia Pulp & Paper, a big Indonesian
company, discovered that their claims were void. The structure
used in the bonds—a Netherlands registration fuel dispenser and an
agreement to take disputes to court in New York—was
determined to be untenable and unenforceable against
Indonesian debtors. The structure, aimed at assuaging
concerns about Indonesian law, is commonly deployed.
Pakuwon Jati was the first issuer to use it since the verdict. fuel dispenser In
its prospectus, the company acknowledged that creditors might
find it “difficult or impossible�to pursue claims. To the lenders,
that made not a blind bit of difference.
Pakuwon Jati sold the five-year bonds at 12%, just what similar
single B-rated borrowers had paid previously. It was not much
more than the 10% that would be offered by a similarly rated
developer in more stable Hong Kong.
This reflects enormous bullishness about Indonesia, where spreads on government bonds have halved in
the past two years (see chart). Pakuwon Jati also sets a benchmark. It is a small company in a difficult
place selling bonds that have no more protection than a share. A 12% reward shows what slim pickings
are available even to the boldest lenders.
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