Bumi to increase coal output next year, issue new shares

By Hiski Darmayana

IDX-listed coal giant PT Bumi Resources Tbk plans to increase coal production next year to anticipate rising demand particularly from India, its key export market.

?We could not yet disclose the exact figure (of the production volume). But what?s certain, we?re optimistic to be able to increase coal production next year,? Corporate Secretary Dileep Srivastava told Petromindo.com Wednesday on the sidelines of the company?s public expose.

Srivastava said that production this year is estimated to reach 80 million tons. During the first nine months of this year, production totaled 60.8 million, contributed by two subsidiaries PT Arutmin Indonesia and PT Kaltim Prima Coal, which respectively has concessions in South and East Kalimantan.

?In terms of market, India will remain as our biggest market, while we leave aside the China market because the economic growth has yet to improve,? he said.

Meanwhile, Investor Daily reported Thursday that China Investment Corporation (CIC) is expected to acquire a 15 percent shares in Bumi through a debt to equity swap mechanism. The paper quoted Bumi Resources Director Eddie Soebari as saying that the company plans to issue new shares worth US$150 million, in which CIC will be a standby buyer.

Eddie, however, declined to say whether the new shares issuance will be taken via rights issue or private placement mechanism. ?The proceeds will be one of the funding sources to repay debts to CIC,? he said.

Bumi plans to repay $1.36 million worth of debts to CIC. Aside from the planned new shares issuance, Bumi also plans to divest 19 percent stake in subsidiary coal miner PT Kaltim Prima Coal (KPC) worth $950 million. It also plans to divest 42 percent stake in PT Bumi Resources Minerals Tbk at a value of $257.4 million.

With the repayment, the company?s outstanding debt to CIC will be reduced to $430 million. Finance Director Andrew Beckham said that the transactions are expected to be completed by the end of this year.

Editing by Reiner Simanjuntak