Bumi Resources looks for $230 million debt refinancing

Publicly listed mining company PT Bumi Resources, which owns the country's major coal miners PT Arutmin Indonesia and PT Kalimantan Prima Coal (KPC), plans to seek US$230 million loan to refinance its debts, the Koran Tempo newspaper reported in its Saturday edition.

Bumi?s director of finance Eddie J. Sobari said his company would soon apply to a credit syndicate, conisting of several banks and foreign financial institutions like Bank IFJ, Credit Suisse First Boston (CFSB) and USLB, for the loan

?The entire loan will be used to refinance debts,? Eddie told journalists in Jakarta on Friday.

The debts include $58 million owed to CFSB and $40 million owed to Bank Mandiri, both of which are due this year.

?The loans from CFSB and Bank Mandiri were taken to finance the purchase of Arutmin,? he said, adding the firm's hareholders had given the green light for the loan in a recent meeting.

Meanwhile, economic daily Investor Indonesia reported on Saturday that the Bumi is targeting its income at $940 million for this year, twice as much as the figure of last year. The sharp incrase comes thanks to the big contribution from the recently acquired East Kalimantan-based KPC.

?The rise (in income) will come in the first and second quarters,? Eddie said on Friday.

Bumi is planning to increase the export volume of South-Kalimantan Arutmin from 14 million tons to 18 million tons of thermal coal in anticipation of the increase in demand from China. KPC?s production will also be raised to 26 million tons from the 18 million tons.

However, Eddie said, Bumi has yet to get the approval from the Ministry of Energy and Mineral Resources for the production increase.

He predicted coal prices will increase by 20 percent from the current $30-$35 per ton for such high quality coal as the one produced by KPC. (*)