Indika obtains approval to ease bond terms

Petromindo|Dasir

IDX-listed PT Indika Energy Tbk has obtained approval from bondholders to ease the terms of its US$500 million bonds maturing in 2023, Kontan reported on Wednesday.

The paper said that the approval will pave the way for the company to realize its intention to acquire more shares in coal mining firm PT Kideco Jaya Agung.

The paper quoted Indika President Director Arsjad Rasjid as saying that more than 97 percent of the bond holders have approved the company?s proposed consent of solicitation, or request to change the terms of the 2023 bond. He did not provide details.

Indika said in September that together with its wholly-owned subsidiary PT Indika Inti Corpindo, the two have entered into separate Share Purchase Agreements with each of Samtan Co., Ltd. and PT Muji Inti Utama, respectively, to purchase 40 percent of coal firm PT Kideco Jaya Agung from Samtan and 5 percent of Kideco from Muji for an aggregate total consideration of US$677.5 million.

Indika said the transaction will turn it as the majority shareholder with 91 percent equity ownership in Kideco and Samtan will retain a 9 percent stake.

Indika plans to issue new bonds worth $600 million to help finance the acquisition. The company needs to change the terms of the previous bonds, which among others stipulate that the company is not allowed to make new borrowings.

Indika has said it hopes to conclude the Kideco acquisition in the fourth quarter of this year.(*)