ARMS plans rights issue to refinance Berau?s debt

By Firmansyah Sembiring

IDX-listed coal mining firm PT Berau Coal Energy Tbk is expected to obtain about US$100 million funds from its controlling parent London-listed Asia Resource Minerals Plc (ARMS) to help refinance maturing debt.

Berau President Director Amir Sambodo said on Monday that ARMS, which holds an 84.7 percent stake in the coal firm, plans to launch a rights issue in March of next year to raise the funds, and that investor Nathaniel Rothschild, which owns 17.5 percent shares in ARMS, is ready to become the standby buyer. No further details about the rights issue plan have been decided.

The rights issue plan comes after Berau earlier cancelled a planned global bond issuance worth US$450 million due to the weak financial market condition. Berau needs the funds to refinance $450 million worth bonds that would mature on July 8, 2015.

Elsewhere, a shareholders meeting on Monday approved a proposal to use part of the company?s remaining IPO proceeds worth Rp 522 billion to help refinance the debt. The company will allocate about Rp 129 billion, or around $10 million for the refinancing purpose.

Amir said that as of September of this year, Berau produced 18.6 million tons of coal, and is on track to meet the full-year output target of 24.2 million tons. About 84 percent of the output has been sold to the export market.

Editing by Reiner Simanjuntak