Release: Bumi announces pricing of $375m Coupon- Guaranteed Convertible Bonds due 2014
Thursday, July 30 2009 - 12:11 PM WIB
The Bonds are expected to be issued by Enercoal Resources Pte. Ltd., a wholly-owned subsidiary of the Company, and unconditionally and irrevocably guaranteed by, and convertible into existing ordinary shares of the Company. The Bonds are expected to be issued at a 30% conversion premium.
Credit Suisse (Singapore) Limited is acting as the sole placement agent for the placement of the Bonds.
Concurrent with the issuance and placement of the Bonds, the Issuer will enter into a cash-settled call spread transaction (the ?Capped Call Option?) with an affiliate of Credit Suisse (Singapore) Limited (the "Counterparty"). Under the terms of the Capped Call Option, the Issuer will purchase call options on the number of Shares of the Company into which the Bonds are convertible.
If on the expiration date of the Capped Call Option, the market price of the Shares is higher than the strike price, then the Counterparty will pay to the Issuer an amount calculated by reference to the difference between the then market price of the Shares subject to a cap.
The Capped Call Option effectively increases the effective conversion premium under the Bonds up to 75% premium to the Bond Issuer.
This is the largest convertible bond plus call spread issuance by an Asian issuer this year to date, and is the first ever call spread overlay transaction to a convertible bond on Asian listed shares.
In addition, on the closing date expected to be 5 August 2009 for the placement, the Issuer will enter into a 5 year cash-settled equity swap transaction (the ?Equity Swap?) with the Counterparty. Under the terms of the Equity Swap, (a) if the Final Price (as described below) is higher than the Initial Price (as described below), the Counterparty will pay the Issuer an amount calculated by reference to the difference, and (b) if the Final Price is lower than the Initial Price, the Issuer will pay the Counterparty an amount calculated by reference to the difference.
The Initial Price and the Final Price will be based on market price references at the beginning and the end of the term of the Equity Swap, respectively.
As part of the equity swap, the Issuer will deposit US$115 million with the counterparty during the term of the Equity Swap. In addition, the Issuer will pay the Counterparty a premium for the purchase of the Capped Call Option using part of the proceeds from the sale of the Bonds.
The Company intends to use the remainder of the proceeds from the Bond issuance for capital expenditures and general corporate purposes.
Bumi?s main coal subsidiaries, PT Kaltim Prima Coal and PT Arutmin Indonesia, are two of the largest thermal coal producers in Indonesia and, collectively, Bumi believes it is one of the largest thermal coal exporters globally with approximately 10.7 billion metric tonnes of combined coal reserves and resources as of end-2008. Additionally, PT Kaltim Prima Coal?s Sangatta mine is the largest export coal mine in the world.
In 2008, Bumi?s coal subsidiaries shipped over 51 MT of coal, of which 90% was sold in overseas markets ? predominantly Asia, including Japan, Taiwan, South Korea, India and China, followed by Europe and the Americas. (end of release)