Geo Energy re-launches bond offering
Wednesday, September 27 2017 - 02:11 AM WIB
SGX-listed Geo Energy Resources Limited, an integrated Indonesian coal mining group, announced Wednesday that its subsidiary, Geo Coal International Pte. Ltd. (GCI) is proposing to issue U.S. dollar-denominated fixed rate senior notes due 2022.
The company said in a statement that J.P. Morgan, Deutsche Bank, CITIC CLSA Securities and BOC International have been mandated as joint bookrunners and joint lead managers.
Geo Energy is rated B2/Stable by Moody?s Investors Service, B/Stable by Standard and Poor?s Ratings Services and B+/Stable by Fitch Ratings. The notes is expected to be rated B2 by Moody?s Investors Service, B by Standard and Poor?s Ratings Services and B+ by Fitch Ratings, the company said.
Geo Energy completed on June 6 a consent solicitation exercise for its S$100 million 7.00% notes due January 2018 (the series 001 notes) issued under the S$300 million multicurrency medium term note program, which was launched to facilitate a planned refinancing of the series 001 notes prior to their maturity date. The company said the exercise received overwhelming support from noteholders, as more than 75 percent of the noteholders voted in favor of the proposed extraordinary resolution allowing for an early redemption of the notes.
The proceeds from the new bond offering will be used for redeeming the outstanding series 001 notes, repaying in full the advances received from Engelhart Commodities Trading Partners (Singapore) Pte Ltd., potential acquisitions of coal mining assets and for working capital and general corporate purposes.
Commenting on the Group?s new bond offering, Tung Kum Hon, Chief Executive Officer of Geo Energy said, ?Our Group believes that market conditions now are better to re-launch our bond offering following the US Federal Reserves? decision to keep interbank borrowing costs steady at 1.00% to 1.25%, which was announced on 20 September 2017. However bearing in mind that the U.S. Federal Reserve?s latest projections envisage three interest rate rises in 2018. Our Group has decided it is in the Group?s interest to re-launch the bond issue following our cancellation on 24 July 2017 due to unfavorable market conditions.
Launching the U.S. denominated bond offering will help us to optimise and refinance the Group?s capital structure. Our Group is constantly on the look-out for potential acquisitions of coal mining assets to acquire and boost our total coal reserves.?
Editing by Reiner Simanjuntak