Issuance the Debt Securities without Public Offering “The issuance of EBUS without Public Offering still requires the submission process to the OJK, rating/guarantee process, using an arranger and monitoring agent (for non-public company), and registration in Indonesia Central Securities Depository.”
To obtain business development funding, the company has an alternative in various financial instruments based on the company’s necessity. On the other hand, Indonesian Financial Authority (“Otoritas Jasa Keuangan” or “OJK”), as financial services regulatory, has issued multiple regulations to provide legal certainty of the financial instruments and protection of the parties involved in the issuance and utilization of the financial instruments.
One of the regulations that OJK has issued is OJK Regulation No. 30/POJK.04/2019 on The Issuance of Debt Securities and/or Sukuk (“Efek Bersifat Utang dan/atau Sukuk or “EBUS”) which Conducted without Public Offering (“POJK 30/2019”). POJK 30/2019 has regulated many aspects of EBUS without Public Offering, including criteria, the parties, definition, and procedures.
Definition of EBUS
In general, the definition of securities can be found in the regulation related to the capital market, which includes bond, share, collective investment contract, etc. Meanwhile, in its website, Indonesia Stock Exchange (“IDX”) has defined EBUS as mid-long term debt securities that are transferable and consist of promises from the issuer to pay interest/profit sharing during the specific period and return the principal debt in the due date. Further, EBUS could also contain the right or obligation (option) to be converted to the company’s share ownership (the EBUS’s issuer).
Definition and Characteristic of EBUS without Public Offering
As commonly EBUS is issued by a public company and listed in IDX to be offered to the public, the EBUS without Public Offering is issued and offer to a certain fixed-investor (“professional investor”). Nevertheless, EBUS without Public Offering still requires the submission process to the OJK, rating/guarantee process, using an arranger and monitoring agent (for non-public company), and registration in Indonesia Central Securities Depository (“ICSD”).
Further and according to POJK 30/2019, EBUS without Public Offering has the following criteria:
- Have maturity date (due date) more than 1 (one) year, with the issuance value at least IDR1 billion or less than IDR 1 billion which the issuance is conducted multiple times then within 1 (one) year reaches a value at least IDR 1 one billion; or
- Have maturity date (due date) less than 1 (one) year which not supervised by other authority (referred to Bank Indonesia), with the issuance value at least IDR billion or less than Rp1.000.000.000,- (one billion rupiah) which the issuance is conducted multiple times then within a period of 1 (one) year reaches a value at least IDR 1 billion.
- EBUS without Public Offering also includes EBUS that have the option to be converted into share, for example medium-term notes, sharia medium-term notes, and long-term notes.
Moreover, EBUS without Public Offering must fulfill the following terms:
- Issued in scrip less and saved in ICSD;
- Rated by rating company registered in OJK or international rating company;
- Only can be repurchased after 1 (one) year since the issuance date;
- Book-entry unit minimum of IDR 25 million or multiple thereof, and the holders at last 49 (forty-nine) parties;
- The issuer must be in the form of:
- Public company;
- Indonesia business entity or legal entity;
- supranational institution;
- collective investment contract which can be issued EBUS based on the prevailing laws and regulations; and
- Must be an offer to the Professional Investor. Professional Investor is the party that can buy EBUS and conduct risk analysis upon the investment of the said EBUS.
General Issuance Procedures of EBUS without Public Offering
Based on POJK 30/2019 and Registration Terms in ICSD, the issuance procedures of EBUS without Public Offering are as follow:
- For a non-public company, the submission process must be conducted by an arranger (Penata Laksana Penerbitan).
- EBUS Registration process in ICSD, including agreement signing with ICSD. This step approximately requires 10 (ten) working days.
- Submission process in OJK by provided Information Memorandum.
- Submit the receipt proof by OJK to ICSD.
- EBUS distribution (issuance) by ICSD to the Securities Account. Securities Account consist of securities’ position and/or funds.
- Reporting process to OJK at last 5 (five) working days since the issuance of EBUS without Public Offering.
Author: Kristalia Andiani Puteri
Gaffar & Co., Indonesian Boutique Law Firm which specializing and focus on commercial law areas e.g. Capital Market & Financial Services.
For further queries and information, contact us:
+62 21 2271 5060 | info@gaffarcolaw.com | www.gaffarcolaw.com
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