Borneo plans to issue global bond

PT Borneo Lumbung Energi & Metal says it may proceed with a global bond issuance to refinance loans used to purchase a stake in London-listed Bumi Plc.

Borneo president director Alexander Ramlie said that the issue would probably amount to ?half? of the US$1 billion it borrowed from Standard Chartered Bank to buy the stake.

The plan follows similar moves by other publicly listed companies to lower their cost of funds by repaying loans using proceeds from bonds after yields decreased following recent upgrades of Indonesia?s sovereign credit rating.

In November, Borneo settled a deal to purchase a 23.8 percent stake in Bumi Plc. from PT Bakrie & Brothers in a deal worth $1 billion.

Borneo pledged its 99.9 percent ownership in subsidiary PT Asmin Koalindo Tuhup, internal cash flow and a stake in Bumi Plc for the loans.

Alexander declined to reveal when the bonds would be issued, saying that would not likely happen this year.

?We are still analyzing [tile bond issuance],? Alexander as quoted by The Jakarta Post said after the annual extraordinary shareholders meeting of PT Bumi Resources, a coal mining company in which Bumi Plc currently holds 29.2 percent stake.

Alexander was approved on Monday to serve as one of 13 commissioners of Bumi Resources.(*)