Arutmin will use bond proceeds to pay loans

PT Arutmin Indonesia, one of the country's major coal producers, said it would use part of the US$300 million cash the company would raise from its recent bond offering to pay bank loans, Bisnis Indonesia reported on Thursday.

Arutmin's Finance Director, Eddie J. Sobarie, said the loans which would be repaid through the proceeds of the bond would include the US$58 million credit provided by CSFB.

"Although the credit from CSFB was obtained only in July, it had been included in the loans that would be soon repaid by the company," he said.

Besides the CSFB credits, Arutmin would also use the bond proceeds to repay loans worth about US$73.9 million from Bank Mandiri, another US$40 million credit from Bank Danamon. The coal mining company would also use the bond proceeds to pay its financial obligation worth about 34 million to its business partners.

According to Eddie, about 70 percent of the proceeds of the bond offering would be used to pay the company's debts. The remaining 30 percent will be used to strengthen the company's capital structure and finance its expansion projects. (*)