Bumi sells 50% stake in Fajar Bumi Sakti

Indonesia's largest coal exporter, Bumi Resources has agreed to sell its 50% stake in coal unit PT Fajar Bumi Sakti for US$200 million to help it ln meeting its debt repayment to China Investment Corp (CIC), later this year, sources close to the transaction said.

Fajar Bumi Sakti manages a concession area of 8,250 hectares containing reserves of 335 million metric tons of 4,000-6,150/kilo calorie coal reserves.

A banker involved in the stake-sale deal as quoted by capital.gr said Bumi Resources will use the proceeds to help make a repayment of $600 million of CIC loans.

"The stake sale in the unit is expected to be completed within weeks," the banker, who didn't want to be named, said.

Another person with direct knowledge declined to name the buyer but said it was a firm based in Indonesia.

Bumi has said previously it plans to repay up to $1 billion of its total debt of $3.8 billion as of June 30 2012 by selling assets and refinancing with cheaper loans.

"Market participants welcome the move as it could reflect Bumi Resources' commitment to repay loans that carry 19% interest and have so far weighed on the company's earnings," said Bernardus Irawan, a fund manager at Lautandhana Securities.(*)