Bumi hires Credit Suisse Group to raise $800m loan

PT Bumi Resources, Indonesia's biggest coal exporter, has hired Credit Suisse Group to help it raise US$800 million to redeem bonds it sold last year, Bloomberg reported on Friday.

The proceeds will be used to redeem $600 million of seven-year debt issued by Bumi Resource's financing unit Indocoal Exports Ltd. in June, the bankers said. About $500 million of the bonds are still outstanding, the company said March 22.

The bonds are backed by receivables from coal mining production and exports at PT Arutmin Indonesia and PT Kaltim Prima Coal, two coal mining units that Bumi Resources said last month it is selling.

Credit Suisse, the world's third-biggest Underwriter of high-yield debt sales, will raise the $800 million via a three-month loan, and replace it by a five-year bond, both offering a yield of 7 percent, the bankers said. Credit Suisse is also asking other banks to join the deal, they said.

The $800 million deal is likely to bring in more than the $5.83 million underwriting fees the Switzerland-based bank earned last year in Indonesia underwriting $743 million of bonds, according to data compiled by Bloomberg. Merrill Lynch & Co. earned about $15 million leading the $600 million bond that is to be redeemed, Bloomberg data showed.

Bumi Resources agreed in March to sell the two coal mining units for $3.2 billion to a group led by PT Renaissance Capital, an investment bank. Bumi is realizing a more-than-fourfold increase in the value of the Kaltim Prima and Arutmin mines over the past five years.

Credit Suisse won the mandate to advise PT Renaissance on the acquisition. Credit Suisse advised six mergers and acquisitions deal in South-east Asia last year, valued at $8.1 billion, including its biggest acquisition deal in Asia-Pacific, a $5.12billion purchase of PT H.H. Sampoerna, Indonesia's third-largest cigarette marker, by New York-based Altria Group Inc., Bloomberg data show.

The bank is also helping Renaissance arrange a $2 billion loan to fund the purchase of the two coal mining units, the bankers said. The loan will be the biggest for an Indonesian company since at least 1999 and tops the $1.3 billion financing BP Plc and Cnooc Ltd. sought last year for a liquefied natural gasproject in the country. (*)