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Bumi Resources to convert $1.99b debt into equity
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Coal marketers: Bumi Resources vice president of investor relations and economist Achmad Reza Widjaja (left), directors Dileep Srivastava (left), Andrew Christopher Beckham (second right) and Raden Ajeng Sri Dharmayanti prepare for a press conference on Dec. 8 in Jakarta. (JP/Anton Hermansyah)
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ndonesia's largest thermal coal miner Bumi Resources will convert some of its debt, worth US$1.99 billion, into equity after securing approval from its creditors.
Director Andrew Christopher Beckham said the conversion would be carried out next year through a preemptive rights issue, in which some of the stocks would be first offered to existing shareholders and the remainder to creditors.
"After we get approval from the Financial Services Authority [OJK], we will hold the rights issue around the second quarter next year," Beckham said on Thursday in a public expose.
He added that the company would issue 29.1 billion new stocks valued at Rp 926 (7 US cents) apiece.
As of September, Bumi had around $4.2 billion debt from 10 creditors, with two Chinese institutions, China Investment Corporation (CIC) and China Development Bank (CDB), having the biggest portions of the figure with $1.06 billion and $550 million, respectively.
CIC, for example, would get 22.6 percent of the company’s share after the debt-to-equity swaps, Beckham said.
Beckham added that another $639 million of Bumi’s debt would be converted into mandatory convertible bonds, making it able to reduce its total debt to $1.6 billion after conversions.
During a boom in the country’s coal industry, Bumi was able to increase its coal production to 80 million tons in 2013 from 54 million tons in 2008.
However, a drop in coal prices in recent years due to the global economic slowdown, particularly in China, led to Bumi’s coal production stagnating at around 84 million tons in the 2014 to 2015 period.
On Thursday, Bumi’s share price dropped by 0.68 percent to Rp 294 apiece. (hwa)
