Noble, Stanchart challenge AKT debt settlement deal

Hard coking coal producer PT Asmin Koalindo Tuhup (AKT), a subsidiary of IDX-listed mining firm PT Borneo Lumbung Energi & Metal Tbk, is facing the risk of bankruptcy after Noble Resources International Pte Ltd and Standard Chartered Bank (Stanchart) filed an appeal with the Supreme Court on a recent debt settlement deal between the company and its creditors approved by the Central Jakarta Commercial Court.

Kontan said that if the appeal, which was made by the two foreign firms on April 12, is accepted by the Supreme Court, AKT will be declared bankrupt.

Noble challenged the AKT debt settlement deal after its right of claim was rejected by the debt restructuring committee. Noble signed an off-take agreement with AKT in November 2011, under which the trading giant would purchase the output from AKT mine, but the latter has failed to fulfill its supply obligation, prompting Noble to be acknowledged as a creditor with total loan of US$104.46 million. The restructuring committee, however, annulled the off-take agreement on the ground that the required royalty has not been paid to the government. Noble insisted that according to the contract, AKT is responsible in paying the royalty.

Meanwhile, Stanchart also challenged the AKT debt settlement agreement because the latter company (99.99% shares) has been put up as collateral by its parent, Borneo, when getting a $1 billion loan from the bank. Stanchart made the appeal because of its claim worth $628.01 million has been rejected by the restructuring committee.

As has been previously reported, Borneo announced April 5 that the Central Jakarta Commercial Court has approved a debt settlement agreement reached by AKT and its creditors.

AKT operates coal concession in Muara Raya Regency, Central Kalimantan. This portal reported last year, that AKT has been targeted to produce 1.8 million tons of coking coal this year, up from 800,000 tons last year. (*)