Geo Energy receives strong demand for $300m notes offering
Thursday, September 28 2017 - 02:03 AM WIB
SGX-listed Geo Energy Resources Limited, an integrated Indonesian coal mining group, announced Thursday that the U.S. dollar-denominated fixed rate senior notes due 2022 to be issued by its subsidiary, Geo Coal International Pte. Ltd. have been fully placed to institutional and/or accredited investors.
The company said in a statement that the notes were priced on September 27. The notes are rated B2 by Moody?s Investors Service, B by Standard and Poor?s Ratings Services and B+ by Fitch Ratings.
J.P. Morgan, Deutsche Bank, CITIC CLSA Securities and BOC International acted as the joint bookrunners and joint lead managers for the notes offering. The notes will be issued on October 4, 2017 and the notes is expected to be listed on the Singapore Exchange Securities Trading Limited on October 5.
?Based on the final issue size of US$300.0 million, the notes offering saw an oversubscription in excess of 3.0 times with a total order book over US$1.2 billion,? Geo Energy said in the statement.
The 5-year notes have a coupon rate of 8.0 percent. The net proceeds of the notes offering will be used for redeeming the outstanding S$100.0 million 7.0 percent medium term notes (?Series 001 Notes?) that Geo Energy issued in July 2014, repaying in full the advances received from Engelhart Commodities Trading Partners (Singapore) Pte. Ltd., potential acquisitions of coal mining assets, and working capital and general corporate purpose.
Commenting on the successful relaunch of Geo Energy?s bond issuance, Tung Kum Hon, Chief Executive Officer of Geo Energy said, ?We are delighted to have raised US$300.0 million following the successful completion of our notes offering. The funds raised will be used to redeem our existing Series 001 Notes before its maturity date of January 2018. In addition, the notes offering has also enabled the Group to broaden our investors base into new geographies.?
He explained the company?s average cash profits in second quarter of this year (2Q2017) was US$15.24 per metric tons based on an average selling price of US$40.11 per metric tons. The Indonesian Coal Index (ICI) for 4,200 GAR coal continued to strengthens, with coal price of US$46.03 per metric tons as of September 22. ?With our PT Sungai Danau Jaya coal mine already in production plus the adjacent PT Tanah Bumbu Resources coal mine?s planned production later this year, our Group is poised to take advantage of any increase in coal demand in the region.?
Commenting on the notes issue, Charles Antonny Melati, Executive Chairman of Geo Energy said, ?The funds from the Notes Offering removes the overhang on our repayment of the Series 001 Notes, strategically strengthens our financial position and improves our capital structure to provide funding for our future acquisitions on investment opportunities in the region, as well as to expand our business as we look towards our target to become one of Indonesia?s top ten coal producers.?
Editing by Reiner Simanjuntak