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oal-mining company PT Bumi Resources obtained shareholders'€™ approval to swap its equity in subsidiaries to debts owed to the China Investment Corporation (CIC).

In an extraordinary shareholders meeting on Friday, Bumi Resources managed to secure the minimum 33.3 percent needed to pass a critical resolution for the transfer of part of its ownership in PT Kaltim Prima Coal (KPC) and Jakarta listed PT Bumi Resources Minerals (BRMS) to CIC to settle its debts to the Chinese company.

Bumi Resources held the second meeting after the first shareholders gathering held last month failed to reach a quorum.

The endorsement was made after Bumi received approval from the Capital Market and Financial Institutions Supervisory Agency (Bapepam) to reduce the minimum quorum from previously 50 percent in the first meeting last December.

The approval was deemed critical as the company is struggling to cut down its mounting debts. The equity to debt swap was proposed last October, when Bumi agreed to settle part of its US$1.3 billion debts to CIC. Under the deal, Bumi will release 19 percent holdings, worth $950 million, in KPC and a 42 percent stake in BRMS, worth about $257.4 million.

'€œWe hope to close the deal with CIC this month, before the Chinese New Year,'€ Bumi director Andrew Beckham said after the meeting.

Bumi has suffered downgrades from rating agencies worried about the company'€™s ability to pay its mounting debts as coal prices remained under pressure. The debt settlement to CIC debts will contribute around a 33 percent drop in its debt level.

Apart from the debt for equity swap in its subsidiaries, Bumi also plans to sell new shares to cover its $150 million remaining debts to CIC and other creditors. Under the plan, Bumi will sell 13.66 billion new shares at Rp 425 each, bringing the estimated proceeds to about Rp 5.8 trillion.

The company planned to seek approval for the shares issuance in a meeting last December but then deferred it.

Bumi corporate secretary Dileep Srivastava said the company would likely launch the share issuance in the second quarter this year.

'€œIf we got approval back in December, then it could have been possible to close everything in the first quarter. But [...] since it was delayed [we must] wait for the new audited numbers,'€ he said.

Shares in Bumi, which are traded on the Indonesia Stock Exchange (IDX) under the code BUMI, closed at Rp 314 on Friday, a 0.64 percent increase compared to a day earlier.

Bumi has been in the spotlight in recent months, in particular a dispute in its 29.2 percent owner Asia Resource Minerals Plc '€” previously Bumi Plc '€” which is now working to release its holding in the coal miner to its Indonesian shareholder the Bakrie Group.