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Inalum raises money for Freeport divestment
State mining holding company PT Indonesia Asahan Aluminium (Inalum) has obtained US$4 billion, part of which will be used to purchase a major stake in gold and copper miner PT Freeport Indonesia (PTFI).
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Freeport CEO Richard Adkerson (center) and PT Inalum president director Budi Gunadi Sadikin (second right) hold a signed divestment document alongside State-Owned Enterprises Minister Rini Soemarno (left), Finance Minister Sri Mulyani (second left) and Energy and Mineral Resources Minister Ignasius Jonan in Jakarta on Sept. 27. (The Jakarta Post/Wendra Ajistyatama)
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tate mining holding company PT Indonesia Asahan Aluminium (Inalum) has obtained US$4 billion, part of which will be used to purchase a major stake in gold and copper miner PT Freeport Indonesia (PTFI).
Inalum president director Budi Gunadi Sadikin told the press on Friday that the payment of US$3.85 billion to Freeport-McMoRan, the parent firm of PTFI, will be processed alongside the renewal of the PTFI special mining permit.
“Our task is over for now and we are waiting for Freeport and the government to settle the environmental issue. And once it is settled, we will transfer the money,” he said, adding that the target of divestment is no later than year-end.
When the deal is completed, Inalum will increase its share of ownership in PTFI from 9.36 to 51.23 percent.
The global bond, which was issued at the Singapore bourse last Thursday, canceled Inalum’s initial plan to finance the Freeport deal through syndicated bank loans.
The bank loan scheme was much more expensive than the global bond issuance because of a potential rate hike, Budi said, adding that global bond issuance would also leave out the need to pay the principal installment.
The bonds are divided into four categories: $1 billion with a 3-year tenor, 5.23 percent coupon rate; $1.25 billion with a 5-year tenor, 5.71 percent coupon rate; $1 billion with a 10-year tenor, 6.53 percent coupon rate; and $750 million with a 30-year tenor, 6.7 percent coupon rate. (bbn)
