Berau hopes to reach debt restructuring deal before year-end

IDX-listed coal mining firm PT Berau Coal Energy Tbk has started initial talks with a committee of bondholders for a debt restructuring agreement, which is expected to be reached before the end of this year, Kontan reported on Saturday.

?There are a number of critical points which are still in the process of negotiation. It is expected before the end of the year, agreement can be reached,? said Berau President Director Edy Santoso.

He said that the company late last year repurchased a total of US$150.2 million worth of notes maturing in 2015 and 2017 from the bondholders, reducing the outstanding bonds to $799.87 million. Edy did not provide further details.

The comments were made following a query by the Indonesia Stock Exchange over the company?s debt restructuring progress. In addition to the lingering coal industry downturn, Berau?s performance has been undermined by its huge debt load. A debt restructuring deal is expected to help improve its financial structure.

Berau Coal Energy has set a production target of 26.5 million tons this year from its subsidiary PT Berau Coal, which operates mines in East Kalimantan, or relatively the same as last year?s output.

Berua Coal operates three producing mines namely Lati mine, Binungan mine, and Sambarata mine in Berau Regency, North Kalimantan.

The well-diversified Sinar Mas Group through Asia Coal Energy Ventures (ACE) acquired more than 73 percent stake in LSE-listed Asia Resource Minerals plc (ARMS), which owns nearly 85 percent stake in Berau, in the middle of last year. (*)