PT Bumi Resources said it will raise cash from non-core assets to accelerate debt repayment, responding to an Indonesia Stock Exchange request to conduct a public presentation on its finances. Shares climbed.
Bumi Resources and PT Berau Coal Energy posted statements late yesterday to the Indonesia Stock Exchange, following a probe initiated by London-listed Bumi Plc. The presentations are scheduled for later today.
Bumi Plc, founded by Nathaniel Rothschild and owner of 29 percent of the Jakarta-based miner, said Sept. 24 it began investigating “potential financial and other irregularities” and hired lawyers to look into a $637 million writedown of development funds and exploration assets. Moody’s Investors Service changed its outlook on Bumi Resources to negative from stable on Sept. 25, while Standard & Poor’s cut its long-term rating by a step to BB- the next day.
“There were some concerns over the company’s debt repayment issue and the statement brought back some confidence,” John Teja, a director at PT Ciptadana Securities in Jakarta, said by phone.
Bumi shares rose as much as 5.5 percent before trading 1.4 percent higher at 740 rupiah apiece at 11:18 a.m. in Jakarta, the highest price since Sept. 21. The stock has plunged 66 percent this year, compared with the 11 percent gain on the benchmark Jakarta Composite index.
The investigation will focus on “extensive” development funds at Bumi Resources and an asset at PT Berau Coal Energy, another coal holding, which were marked down to zero in the accounts of Bumi Plc as of Dec. 31, Bumi Plc said. It gave no figures for the writedown at that time.
The probe is the latest turn in a dispute involving Rothschild and Indonesia’s Bakrie family since they agreed to a $3 billion deal in 2010. Relations between Rothschild and Bumi Co-Chairman Indra Bakrie soured last year after the U.K.-based financier made public a letter to then-Chief Executive Officer Ari Hudaya urging a “radical cleaning up” of Bumi Resources.