Bumi Agrees to Settle $1.3 Billion Debt With CIC Via Share Swap

PT Bumi Resources agreed to settle a $1.3 billion debt with China Investment Corp. by swapping part of it for stakes in units of Indonesia’s largest thermal coal producer and extending the maturity of other principle owed.

Bumi will exchange part of the borrowings for 42 percent of its stake in PT Bumi Resources Minerals and 19 percent of its holdings in PT Kaltim Prima Coal, PT Indocoal Resources and PT Indocoal Kaltim Resources, as well as $150 million of new shares in Bumi, the company said yesterday in an e-mailed statement.

The rest of the debt will convert into a three-year loan at a “competitive market rate,” it said in the statement without saying what proportion of the borrowings would be extended. The company will seek approvals needed to close the deal this year.

Bumi posted a first-half net loss of $290.9 million after paying $299.2 million in interest and financial costs. That was on top of a net loss of $346.2 million a year earlier.

Indonesia’s Bakrie family has been battling with financier Nathaniel Rothschild for control Bumi Plc, which owns stakes in Indonesian coal mines. In July, the London-listed company agreed to sell its 29.2 percent in Bumi Resources to the Bakrie Group.