Malaysia's United Profit plans bond issue to fund coal mine buy

Malaysian firm United Profit International Sdn Bhd (UPI) plans to issue bonds worth US$50 million (RM178 million) to help finance its coal mine purchase in Indonesia, Business Times reported Monday.

Affin Investment Bank Bhd (AIB) is the lead arranger for the debt paper sale and it hopes to complete the exercise by the first quarter of next year, the bank's president-cum-chief-executive- officer Datuk Sheikh Awab Sheikh Abod.

UPI owns Indonesian-based PT Gunung Harang Sejahtera, which owns the coal concession exploration rights to a 2640 ha mine in south Kalimantan.

The mine has an estimated coal reserves of about 30 million metric tonnes (MT).

UPI chairman Mohd Fakri Mohd Ariffin said the proceeds from the bond sale will be used to buy equipment and increase its production capacity to 2 million MT from 500,000 MT currently.

Demand for coal is strong, coming from China as well as regional independent power producers.

"Our target market is China, given that the market needs 2 billion MT of coal per year," Fakri said.(*)