Bumi Resources taken to court by creditor

The Central Jakarta Commercial Court started Thursday hearing a debt postponement petition (locally known as PKPU) filed by investment company Castleford Investment Holding Ltd, a creditor of IDX-listed coal giant PT Bumi Resources Tbk.

Bumi said in a statement Thursday that despite the PKPU petition, the company continues to seek an out of court debt settlement with Castleford and other creditors. It added that the case has not affected its mining operation.

Under a PKPU, a company will be given an opportunity to propose a debt settlement to all of its creditors, a restructuring process supervised by the court. If the company fails to obtain creditors' approval for the debt settlement proposal, the court will declare the company bankrupt.

Under the law, the commercial court will give an order over a PKPU appeal within 20 days of its submission.

Castleford filed the PKPU petition on April 6. Castleford lawyer was quoted by Kontan as saying that the company provided Bumi late in December 2014 loan worth US$50 million with interest rate of 6.7 percent. The loan matured in December 2015, and since the maturity, the loan value has inflated to $54.3 million.

Bumi has outstanding debts worth about US$4 billion owed to major creditors such as China Investment Corporation and China Development Bank, in addition to Castleford. The company in September last year proposed debt restructure schemes as it faces difficulties to repay the loans amid the lingering coal market downturn. (*)