Indonesian port operator Pelindo III is set to issue bonds worth a total of $400m to finance its port expansion projects, local media reports said.

Pelindo III manages ports in the central and eastern parts of Indonesia. The debt raising will be in the form of US dollar and rupiah bonds in equal amounts, finance director Wahyu Suparyono was quoted as saying.

“Half of the target will be generated from the dollar bonds and the rest from the rupiah bonds. We plan on offering the dollar bonds first, and hopefully everything will be completed within the next two months,” he said, adding that underwriters would be named soon.

Road shows will be held around the region as part of the company's efforts to attract foreign investors. The coupon has not been set yet but it is expected the bonds will have maturity periods from six to seven years.

The bonds issuance is part of Pelindo’s attempt to finance its capital expenditure which will reach about IDR5trn ($441.97m) this year, with the remainder coming from banks loans and internal resources.

Pelindo III has big expansion plans this year with some IDR3.8trn expected to be used for its new Teluk Lamong Port in Surabaya in East Java. The port is needed to help ease congestion at Surabaya's main Tanjung Perak Port. Teluk Lamong is scheduled to start operations in May and be fully operational by September.

The rest of Pelindo III's capital expenditure budget will be used for equipment to boost its other ports. It operates a total of 17 ports, in areas including Bali; Banjarmasin, South Kalimantan; Bima, West Nusa Tenggara; and Semarang, Central Java.

Pelindo expects to see a 10% to 15% rise in revenue to around IDR5.5trn this year. Net profits are expected to increase by about 10% to IDR1.32trn, partly due to the company’s cost efficiency programme, Wahyu added.