Bumi to buyback 3.75% of outstanding shares

Coal mining company PT Bumi Resources plans to buy back 3.75 percent of its outstanding shares over the next 18 months.

Bumi Resources corporate secretary Dileep Srivastava said on Friday that the company’s shareholders had approved the buyback plan.

“Our immediate objective is to buy about 200 million shares or about US$60 million to $70 million worth of shares.

So that we are fully empowered to pay convertible bonds next year,” Srivastava said after Bumi’s extraordinary shareholders general meeting.

He cited that currently Bumi had 20.77 billion shares and a treasury stock of 480 million shares. The company, he said, decided on an 18-month period, starting from the shareholders’ approval, to carry out the shares buyback.

Srivastava also said that a buyback during the current depression of Bumi’s share value would benefit the company. The company’s shares traded on the Indonesia stock exchange at Rp 2,200 (24 US cents) at closing time on Friday.

He said that the company would buy the shares based on the market price.

“We will buy from the market whatever the market price is. If today it is Rp 2,000, we buy at Rp 2,000. But, rather than having an extraordinary general meeting every time the share’s price changes, we have taken a cap. And the cap is Rp 5,000,” Srivastava said.

He said that the company estimated a good performance for the third quarter earning.

“We will make a statement in the end of November, but we are very happy to say that we are experiencing outstanding performance in sales volume and sales production,” he said.

“Our production in the third quarter exceeded 16 million tons to 17 million tons and our sales this year should be around 60.5 million tons.”

The company targeted to produce about 66 million tons coal by the end of the year. Srivastava said that the company expected to produce up to 100 million tons coal in 2012.

Srivastava also revealed that the company would settle its loan to the China Investment Corporation (CIC) gradually.

“We will settle $600 million this month, this year. Next $600 million we will settle in October 2012. And the remaining $700 million we will settle in Oct. 2013,”
he said.

According to the Indonesia Stock Exchange’s website, the public holds 70.82 percent of the shares while the remaining 29.18 percent is owned by Vallar Investment UK Ltd. (rcf)