Indonesia’s largest tyre manufacturer, Gajah Tunggal, announced a US$500m bond issue to fund the buy-back of existing bonds worth $400m, issued in 2005, which mature in July 2014.

The rest of the proceeds will be used to increase capital. The new bonds will have a maximum interest rate of 10%, compared with the current 10.59%, and will mature in 2017.

Gajah Tunggal has five tyre and inner tube plants in Indonesia and has separate facilities making tyre cord and styrene butadiene rubber. It has a strategic partnership with Michelin.