KPC may get loan from bank to refinance debts

E. Kalimantan coal miner PT Kaltim Prima Coal (KPC), is considering syndicated bank loans as an option to help refinance its debt, in addition to a planned bond issue, a company executive said Monday.

"Besides the bond issue plan, we are also looking at syndicated loans from banks," Eddie Sobari, finance director at PT Bumi Resources, KPC's parent company, told Dow Jones Newswires.

Sobari said the company has yet to decide on which options it would use.

"But we hope that we can choose the best option and complete our plan to refinance the debt as soon as possible," he added.

Kaltim Prima Coal, which Bumi bought from Rio Tinto PLC (RTP) and BP PLC (BP) for $500 million last year, currently has total debt of about $400 million, he said.

Bumi has said it plans to issue a $375 million bond in the second half of this year to aid in its unit's debt refinancing.

However, Sobari Monday said the planned issue might not go ahead, depending on the yield demanded by investors.

He said the company hopes the yield will be lower than the 11%-12% interest charged on loans the company plans to pay with the proceeds from the bond issue.

The lead managers for the issue are Credit Suisse First Boston and JP Morgan.(*)