Alternative Funding to Overcome Liquidity Gap Resulting from Subsidized Product Obligation Fulfilment: A Study on Asset Backed Securities vs. Bank Loan at PT. Pupuk Indonesia (Persero)

About Us

Ipmi Repository is an online archive service which is managed by IPMI Library - Learning Resource Center. Established for collecting, managing, saving, preserving and disseminating digital copies of intellectual output of IPMI International Business School such as academic journal, books, theses, Group Field Project, Community Involvement Project, Case Study, conference paper, and other types of research publication. The main objective of this repository is to provide long-term, public, open access and easily retrieve to the digital collection to support teaching-learning process.

"Knowledge without observation is nil"

Suryomurtjito, Aditya Imannudin and Dahlan, Hafidh and Susanto, Hary (2015) Alternative Funding to Overcome Liquidity Gap Resulting from Subsidized Product Obligation Fulfilment: A Study on Asset Backed Securities vs. Bank Loan at PT. Pupuk Indonesia (Persero). Project Report. Sekolah Tinggi Manajemen IPMI, Jakarta Selatan. (In Press)

[img] Text
Alternative Funding to Overcome Liquidity Gap.pdf - Submitted Version
Restricted to Registered users only
Download (11MB)

Abstract

Fertilizers availability plays an important role in increasing agricultural production and preserving national food security in a sense that it has been directly impacting the price of rice as the main food source for Indonesian which is regarded historically as the key component of nationwide inflation level. For this reason, it has become the Government of Indonesia main concern particularly in managing the procurement and distribution of required fertilizers to respective traditional farmers. To stabilize the price of this valuable grains, the government introduced a fertilizer subsidy facility scheme to the farmers in the form of Public Service Obligation (PSO) conducted by a State Owned Enterprise (SOE) manufacturing fertilizers. In reality, the establishment of the PSO has created its own problems and has been burdening PT. Pupuk Indonesia (Persero) or “PIHC” as the fertilizer producer SOE assigned with the responsibility to engage the PSO scheme; the difficulties in determining the fertilizer requirements accurately have led to an insufficient annual subsidy budget which further causing the payment of current year subsidies by the government to be carried out to the following year. The payment mechanism of subsidy also takes around 4-5 months to complete while the main raw material source i.e. the natural gas, the major contributor of production cost, needs to be paid in advance. In order to meet the cash shortfalls resulting from this scheme, currently PIHC uses a short term loan facility. Short term loan facility in the form of bank loan is actually reliable enough to cover the cash requirement arising from working capital problem immediately, however, it is somewhat costly and may hinder PIHC expansion plan as it will affect the company’s Debt Equity Ratio (DER) and legal lending limit whereby the loan availability or the fund the bank can provide will decrease accordingly. This study analyzes securitization as the alternative financial instrument to solve the liquidity issue in PIHC.

Item Type: Monograph (Project Report)
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Library > GFP (Group Field Project)
Depositing User: Latifah Latifah
Date Deposited: 20 Jan 2020 04:25
Last Modified: 20 Jan 2020 04:25
URI: http://repository.ipmi.ac.id/id/eprint/496

Actions (login required)

View Item View Item