Bumi proposes debt to equity swap, other restructuring schemes

About 80 percent of creditors of IDX-listed coal giant PT Bumi Resources Tbk are expected to approve its debt restructuring proposal at an upcoming November 9 creditors meeting, Kontan reported on Saturday quoting a member of the debt restructuring committee.

The paper said that according to Bumi?s debt restructuring proposal, part of the company?s debts will be restructured via a debt to equity swap mechanism. A share price of Rp 926.16 will be used in the conversion process. ?God Willing (debt restructuring will use the debt to equity scheme),? said Dileep Srivastava, Director and Corporate Secretary of Bumi to the paper.

The debt to equity scheme will affect total debts of US$1.81 billion owed to 11 creditors including Country Forest Limited (CFL), Castleford Investment, and Axis Bank.

The paper said that another scheme to restructure the debts is through the issuance of contingent value rights (CVR) worth $100 million, which will mature in five years since issuance.

Another debt restructuring instrument is mandatory convertible bonds (MCB) worth $630 million, to be issued to creditors among others CFL, Axis, UBS and DBS. The MCB will carry coupon rate of 6 percent per year, to be matured in seven years since issuance.

Meanwhile, for debt owed to China Development Bank, Bumi will replace 32.24 percent of the debt with new senior secured facility and or new notes 2021, while the remainder to be replaced with tranche C facility.

According to debt restructuring committee, Bumi?s verified debts total Rp 135.78 trillion owed to 270 creditors. (*)