PT Bumi Resources, Indonesia’s largest coal exporter, has extended the maturity of a $150 million loan just weeks after its credit rating was cut on refinancing concerns, a person familiar with the matter said.
Credit Suisse Group AG, the arranging bank, and about 10 to 12 other lenders, mainly private investors, rolled over their pledges from the original three-year facility for a further 15 months, the person said, asking not to be identified because the details aren’t public. The initial transaction, signed in August 2010, paid interest of 11 percent more than the London interbank offered rate, according to data compiled by Bloomberg.
The extension comes after Bumi Resources, which is part-owned by Bumi Plc, last month had its debt rating cut to Caa1 from B3 by Moody’s Investors Service, seven levels below investment grade. The Jakarta-based company said at the time it had an August deadline to refinance the $150 million loan and about $350 million more bank debt at unit PT Bumi Resources Minerals that matures in September.
Dileep Srivastasa, a Jakarta-based director of Bumi Resources, wasn’t immediately available for comment on the loan extension when called twice and didn’t reply to an e-mail today. Indonesia’s Bakrie family, a palm-oil-to-property empire founded in Sumatra in 1942, are shareholders in PT Bumi and are working on a plan to buy a further 29.2 percent from Bumi Plc for $501 million.
The London-based company has been at the heart of a battle for control between co-founders Nathaniel Rothschild, scion of a centuries-old British banking dynasty, and the Bakries. The stock plunged 69 percent last year as Rothschild and the Bakries each made rival proposals to unwind the $3 billion deal that brought them together in 2011.
The London-listed entity last month agreed to sell its 29.2 percent stake in Bumi Resources to the Bakrie Group as part of a two-step plan to separate from one of Indonesia’s wealthiest families. Bumi Chairman Samin Tan agreed to buy the Bakries’ 23.8 percent holding in Bumi Plc for $223 million.
The Bakries said in June they had the full amount of funds available to complete the deal.
Standard & Poor’s cut its long-term corporate credit rating on Bumi Resources to CCC from B- on Aug. 5 to “reflect our view of the company’s weakening liquidity and growing challenges in refinancing its debt maturities over the next six months.”
“Bumi’s capital structure is unsustainable unless the company restructures or reduces its debt through asset sales,” S&P said in a statement. Refinancing of Bumi Resources Minerals’ debt “will be difficult without any tangible progress on Bumi’s proposal to sell its stake in BRM.”
The agreement to extend the maturity of the $150 million facility was signed on Aug. 7, the person said today.