PT Bumi Resources (BUMI) plans to raise 8.05 trillion rupiah ($682 million) via a rights issue over the coming two months to help reduce its debt load.
Shareholders passed a resolution in Jakarta late yesterday allowing the Indonesian coal miner to issue 32.2 billion new Series B shares at 250 rupiah apiece. Series A shareholders owning 20 shares will be entitled to subscribe for 31 new shares, Bumi director Dileep Srivastava said by e-mail today. The company plans to complete the fundraising by Sept. 1, assuming all existing shareholders take up their entitlements.
Bumi Resources needs a cash infusion to lighten its some $4.7 billion of short-term debt after a two-year slide in coal prices dented earnings, pushing the company ever closer toward defaulting on its obligations. The member of the Bakrie group of companies has delayed coupon payments on some of its U.S. dollar bonds, and offered to sell assets to repay money owed to creditors including sovereign wealth fund China Investment Corp.
Srivastava didn’t reply to a separate e-mail seeking comment on whether the company’s biggest shareholders will take up their rights to the new stock.
Some $150 million of the proceeds from the capital raising will be used to trim Bumi’s $1.3 billion debt to China Investment Corp., according to a June 26 investor explanatory note. Another $150 million is to be set aside to settle loans owed to China Development Bank Corp., Credit Suisse Group AG, Deutsche Bank AG, UBS AG and Axis Bank Ltd., while a further $150 million will be used to pay back monies owing to Castleford Investment Holdings Ltd.
Bumi also intends to redeem $150 million of its $375 million of 9.25 percent convertible bonds which mature Aug. 5, according to the notice. An attempt to extend the maturity of those notes by seven years to July 2021 failed at a June 20 meeting in Singapore after the gathering didn’t achieve the requisite quorum.
Srivastava said in an e-mail June 23 that the company will continue to “engage proactively” with bondholders over the coming weeks, has no issue with servicing its debt and is “up to date” on its obligations.
Bumi’s $700 million of 10.75 percent 2017 bonds rose 0.17 cents to 49.407 cents on the dollar as of 10:08 a.m. in Singapore, Bloomberg-compiled prices show. The notes, sold to investors at par in September 2010, dipped as low as 35.927 cents in May.
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