Bayan Resources secures $300 million loan

Coal mining firm PT Bayan Resources has secured loan worth US$300 million from a syndication of local and foreign banks to repay its maturing debts and to finance its capital expenditure, Kontan reported on Thursday.

The syndicated loan was jointly arranged by lead arranger ING Wholesale Banking, Standard Charter Bank and Sumitomo Bank. Other banks in the syndication include ANZ Panin Bank, Singaporean branch of Commerzbank Aktiengesellschaft, Credit Industriel et Commercial, Mizuho Corporate Bank, DZ Bank Ag and Bank Mandiri.

Bayan Resources? president director Eddie F.W. Chin said that the loan would be used to repay the company?s maturing debts and finance its capital expenditure.

He said that the company was also still preparing its initial public offering (IPO) plan to raise additional funds to finance the company?s expansion.

Bayan has just completed its road show to several countries including Singapore, Hong Kong and the United States to promote the IPO plan to foreign investors.

The company has reported earlier that it planned to sell about 25 percent of its enlarged shares to the public in August, this year. The shares will be sold at a price range of between Rp 5,600 and Rp 7,700 each. With such a price scenario, Bayan expects to raise between Rp 4.6 trillion (1US$=Rp 9,130) and Rp 6.4 trillion from the IPO.

Bayan plans to produce a total of 9 million tons of coal this year, almost double last year's output. This is possible because a number of subsidiaries have started to produce. PT Perkasa Inakakerta in Bengalon, East Kalimantan started production in the middle of 2007, PT Wahana Baratama Mining, which located in Satui, South Kalimantan in late 2007, while PT Teguh Sinar Abadi and PT Firman Ketaun Perkasa in East Kalimantan will start production in the second quarter of 2008.

Bayan produced a total of 4.7 million tons last year with PT Gunungbayan Pratamacoal contributing 4.1 million tons of the total.

Bayan is owned by Dato Low Tuck Kwong (75 percent), Jenny Quantero (15 percent) and Engki Wibowo (10 percent. After the IPO, Low Tuck Kwong's ownership will drop to 51.3 percent, Jenny's 11.3 percent, Engki's 7.5 percent while the public will hold 25 percent. (*)