Borneo to sell 20 percent of Asmin Koalindo?s shares

PT Borneo Lumbung (BORN), one of the country?s major coal mining companies, plans to sell 20 percent of PT Asmin Koalindo?s shares to Posco Energy of South Korea to raise funds for the repayment of maturing debts to Standard Chartered Bank, Kontan reported on Tuesday.

Under the memorandum of understanding (MoU) agreement on the sale and purchase agreement signed by Borneo and Posco recently, the Korean company would buy Koalindo?s shares for US$5 trillion or US$560 million.

There was no confirmation from Borneo about the sale plan, but Kenneth Raymond Allan, one of Borneo?s directors said recently that the company was negotiating with two potential investors to buy the coal mining company?s 20 percent shares.

Borneo has total debts of about $1 billion to Standard Chartered Bank, which carry interest rate of 5.65 percent on the top of Libor rate. The 5-year loan was used to purchase 23.8 percent of Bumi Plc?s shares from Bakrie and Bothers, and Long Haul Holdings Ltd. (*)