Mandiri provides $360m in loan for Medco to acquire Newmont?s mine

IDX-listed state owned bank PT Bank Mandiri Tbk is participating in the syndicated loan worth US$750 million provided to IDX-listed energy firm PT Medco Energi Internasional Tbk to acquire the interest of Newmont Mining Corporation and Sumitomo Corporation in copper and gold mine Lombok, West Nusa Tenggara province.

Mandiri?s Corporation Director Royke Tumilaar said the bank, which leads the syndicate, as will contribute $360 million to the syndicated loan. The rest will be provided by state owned banks BNI and Bank Rakyat Indonesia (BRI).

Royke said the copper and gold mine did not have financial reports over the past years but its cash flow is good, while its prospect is bright given the rising gold price.

?Newmont has two types of product, gold and copper. The gold owned Newmont is highly valued and the reserve is still huge,? Royke was quoted by Kontan.co.id as saying on Monday

The syndicated loan will be disbursed within the two years. In order to protect the loan against the turmoil in copper and gold prices, Mandiri requires a hedging for the loan, Royke said.

Medco recently announced it has agreed to acquire PT Amman Mineral Indonesia (MMI) which controls 82.2 percent of PT Newmont Nusa Tenggara (PT NNT), the owner of the mine, for $3.6 billion. MMI has agreed to acquire the interest in PT NNT from Newmont and Sumitomo. (*)