BUMI transfers 19% stake in KPC to CIC

IDX-listed PT Bumi Resources Tbk. announced on Thursday that 19% of its holdings in Kaltim Prima Coal (KPC), valued at US$950 million, has been transferred to China Investment Corporation (CIC) as part of the debt settlement agreement announced on Oct. 9, 2013

A sum of $1,989 million is due to CIC as loan principal, deferred interest and make-whole costs. With this transfer of KPC stake, the amount payable to CIC stands reduced to $1,039 million.

Fourty two percent of BUMI?s holdings in PT Bumi Resources Minerals Tbk. (valued at $257 million) and $150 million BUMI equity are expected to be transferred to CIC by September 2014, following the closure of the BUMI Rights Offering approved on June 30, 2014.

Consequentially, the residual loan to CIC would reduce further to $632 million, at an interest rate of? LIBOR +6.7% per annum. No interest or principal is payable in the first 1 2 months; principal is payable semi annually over the next 2 years, whilst interest is paid monthly from the 13th month onwards.

Ari Hudaya, President Director, said, ?This is a first major step in restoring financial health and a proof of company commitment to reduce debt. We welcome CIC as our equity partner and look forward to grow our assets from strength to strength. Fundamentally, the Company is strong, has built annual coal capacity exceeding 90 million tons and significantly raised all round efficiencies in operations and costs.?

He added, ?We are confident our revised capital structure coupled with the recovery of coal prices would enable us regain health and return the company back to profit.?

Editing by Johannes Simbolon