JAKARTA (Yosefardi) – Giant coal producer PT Bumi Resources Tbk (BUMI) will seek shareholders’ approval on debt settlement proposal to China Investment Corporation (CIC).
BUMI has in October 8, 2013 signed agreement with CIC for unpaid principal debt of US$1.3 billion, to be converted (swap) with 42% BUMI’s ownership in PT Bumi Resources Minerals Tbk (BRMS), and 19% BUMI interest in PT Kaltim Prima Coal (KPC), Indocoal Resources (Cayman) Ltd, and PT Indocoal Kaltim Resources.
BUMI will also issue new shares worth US$150 million. The rest of debt, excluding principal debt, will be converted into loan with tenor of 3 years with a competitive interest rate.
BUMI views that CIC debt settlement as the material transaction as it will impact on transfer of BUMI asset, then it needs shareholders’ approval.
BRMS is valued for US$257 million, or Rp268 per share. BUMI expects the transaction on BRMS shares sale will be completed by end of November this year. Bumi said BRMS shares borrowed to other parties would have been returned before transferring to CIC.
KPC is priced at US$950 million. KPC will launch rights issue, of which 19% shares will be absorbed by Bumi Resources (Newco), Bhira Investments Limited (affiliated to Tata Power), and PT Kutai Timur Sejahtera.
Alongwith the rights issue, all KPC’s shares owned by Kalimantan Coal Ltd and Sangatta Holding Ltd (both are fully controlled by BUMI) will be transferred to BUMI.
After rights issue, BUMI will hold 51% shares of KPC. The transfer of KPC shares to CIC is expected to take place in end November this year.
BUMI itself will also issue new shares worth US$150 million.