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Borneo Lumbung Said to Start to Market Bumi Loan to Banks

PT Borneo Lumbung Energi & Metal, the Indonesian coking coal maker buying a stake in coal producer Bumi Plc from PT Bakrie & Brothers for $1 billion cash, will begin marketing a loan to finance the purchase to banks, according to a person familiar with the matter.

Borneo Lumbung said earlier this month it will use a $1 billion loan from Standard Chartered Plc to fund the acquisition. Borneo plans to purchase a 23.8 percent stake in Bumi to access coal mines in Indonesia supplying China, the world’s biggest buyer of the fuel.

London-based Standard Chartered will this week begin approaching other lenders to join it as an equal arranger for the facility, the person said today, asking not to be identified as details are private. The five-year loan will pay a margin of 565 basis points more than the London interbank offered rate, plus a 50 basis-point extra spread to onshore lenders, the person said.

As collateral for the amortizing loan, Borneo pledged holdings in Bumi and its units, including a stake in coking-coal mining unit PT Asmin Koalindo Tuhup, Borneo President Director Samin Tan told reporters in Jakarta on Nov. 1.

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