Arutmin will use part of proceeds from bond offering for debt refinancing

Major coal producer PT Arutmin Indonesia, a subsidiary of PT Bumi Resource, plans to issue some US$300 million worth of bonds in the "near future."

Company finance director Eddie J. Soebari was quoted by the Bisnis Indonesia daily as saying on Saturday that the company would allocate $160 million to repay maturing debts, while the remainder for working capital and business expansion.

"The larger part of the funds from the bond offering would be used for debt refinancing," he said.

He said that Arutmin had appointed two local securities companies PT Trimegah Securities and PT Mandiri Sekuritas to jointly underwrite the US dollar denominated bond which would be traded through the Surabaya Stock Exchange.

Arutmin which operates massive coal mining area in South and East Kalimantan booked a net profit of about US$19.8 million in 2002, an increase of 26.23 percent from US$15.7 million in 2001.

The company obtained its 30-year contract of works on its mining area in the province in 1989. Bumi Resouces controls the majority of Arutmin shares after it took over BHP Billiton's shares in the coal mining company. (*)