Star Energy completes $580m green bond offering to fund Chevron geothermal acquisitions

Star Energy completes $580m green bond offering to fund Chevron geothermal acquisitions Wayang Windu Unit II, West Java, Indonesia (source: Aecom)
Alexander Richter 19 Apr 2018

Star Energy Geothermal (Wayang Windu) is offering $580 million worth of green bonds in efforts to help to quickly refinance debt for funding the acquisition of two of Chevron's geothermal assets, the Salak and Darajat geothermal fields.

As reported yesterday, Star Energy Geothermal (Wayang Windu) Ltd (SEGWW), has just completed an environmental bond offering or green bond worth $ 580 million.The subsidiary of Star Energy Group Holdings Pte Ltd has set a coupon of 6.75 percent, as reported by Kontan in Jakarta.

The bonds will be issued as of April 24. With a 15-year tenor, the notes will mature on April 24, 2033. The first coupon payment is scheduled for October 24, 2018.

Acting as joint lead manager in this publication are Barclays Capital and DBS Bank Ltd / London, Deutsche Bank Securities Inc., and Maybank Kim Eng Securities Pte Ltd. Barclays Capital and Deutsche Bank Securities Inc. also act as global coordinator. Rating agency Moody’s rewarded this green letter with a rating of Ba3. While Fitch rated BB-.

Star Energy offers the bonds by holding roadshows to several countries, ranging from the United States, Britain, Singapore, and back to the United States. More than half of the bond offerings are absorbed by investors from the United States and London.

The proceeds of the bond issuance is intended to refinance the debt alias refinancing . In 2013, SEGWW issued bonds worth US $ 350 million which will mature in 2020. Last year, SEGWW accelerated the repayment of the bonds through refinancing sourced from bank loans.

SEGWWL obtained a US $ 660 million loan from a banking syndicate led by DBS Bank. The bank loan has a term of five years and can be extended to five years.

Refinancing through bank loans is a Star Energy strategy because it requires quick funds to acquire two of Chevron’s geothermal assets, namely Salak geothermal field and Darajat geothermal field. In March 2017, Star Energy has completed the $ 2.3 billion acquisition through a consortium with AC Energy (Ayala Group’s Philippine energy business arm) and Thailand Electricity Generating PCL (EGCO) power producer.

Well, the rest of this banking loan will be accelerated repayment using the proceeds from the issuance of green bond . The goal, so that the management of financing more stable and more certain. With a 15-year debt, the company could be more scalable to design expansion.

In addition, the bonds provide fixed coupon while the SEGWW bank loans earn using floating interest rates. With fixed interest, Rudy said, the management of financing can be more certain and more measurable.


SEGWW currently operates PLTP Wayang Windu located in Pengalengan, Kabupaten Bandung, West Java. PLTP Wayang Windu operates two geothermal turbine generator units. The first unit operated commercially in 2000 with a capacity of 110 MW. The second unit, with a capacity of 117 MW, operates commercially in 2009. Under the energy sales agreement, PLTP Wayang Windu will supply electricity to PLN up to 400 MW.

This year, Star Energy will be more focused on developing the Salak geothermal field that has been acquired from Chevron in 2017. The development of the Wayang Windu geothermal field is scheduled for next year. In 2019, Star Energy plans to deploy a drilling program at Wayang Windu in order to seek additional geothermal reserves for the expansion of the geothermal power plant.

The Star Energy Group is a SEGWW shareholder with ownership of 60%. The remaining 40% is owned by Electricity Generating PCL (EGCO) and Mitsubishi Corporation with 20% share ownership.

The Star Energy Group’s shareholder is a Prajogo Pangestu tycoon with a 66.7% stake. The remaining 33.3% is owned by BCPG Public Company.

Currently, PT Barito Pacific Tbk ( BRPT ), a company controlled by Prajogo with a 71.19% share ownership, is processing a Star Energy acquisition of US $ 755 million. Barito will take over Prajogo’s stake in Star Energy through an inbred transaction. Barito will hold a rights issue while Prajogo as the main shareholder of BRPT will execute the rights issue in the form of 66.68% shares of Star Energy.

Source: Kontan