KPC receives largest loan since 1997 economic crisis<\/p>\n
Johannes Simbolon, Jakarta Post, Singapore<\/p>\n
Giant coal producer PT Kaltim Prima Coal has secured a US$385
\nmillion loan from a bank syndicate to refinance its debt, marking
\nthe revival of the foreign financial institutions's trust in
\nlocal companies.<\/p>\n
Helman Sitohang, the head of the Indonesia, Malaysia and
\nThailand office of Credit Suisse First Boston (CSFB), said it was
\nthe largest loan ever received by an Indonesian firm in a single
\ntransaction since the economic crisis hit the country in 1997,
\nparalyzing most of the nation's companies and making Indonesia's
\ncorporate sector the pariah of foreign financial institutions for
\nyears.<\/p>\n
The CSFB is the sole arranger of the loan, which is provided
\nby a total of 24 financial institutions, including BN Paribas,
\nBank of Tokyo Mitsubishi, West LB, Bayerische Hypo-und
\nVereinsbank AG, Bank of Chinatrust, Bank Internasional Indonesia,
\nMoskow Narodney, RBZ.<\/p>\n
\"Not only demonstrating the trust of the financial sector in
\nKPC and its holding company PT Bumi Resources, the signing of the
\nloan agreement reflects the confidence of the financial sector in
\nIndonesia in general,\" Helman said, after the signing of the
\nagreement.<\/p>\n
He said confidence had been growing during the administration
\nof President Megawati Soekarnoputri, and was now being
\nstrengthened by the peaceful elections.<\/p>\n
KPC was formerly owned by Anglo-Australian mining giant Rio
\nTinto and British energy giant BP Plc before Bumi Resources,
\ncontrolled by the Bakrie family, bought out the firm last year
\nfor $500 million. Publicly listed firm Bumi also owns PT Arutmin
\nIndonesia, which is based in South Kalimantan.<\/p>\n
Both firms are expected to produce 40 million tons of coal
\nthis year, up from less than 30 million tons last year. In 2007,
\nBumi targeted its combined output at 70 million tons, making it
\nthe world's largest coal firm.<\/p>\n
KPC was valued at about $820 million when it was acquired by
\nBumi from Rio Tinto and BP last year. Now, according to KPC's
\ndirector Eddie S. Soebari, the value of Bumi has increased to
\n$1.9 billion, given the increase in its production, reserves and
\nthe rising coal price.<\/p>\n
Helman admitted that KPC's performance and potential had
\nattracted financial institutions to the extent that CSFB could
\narrange the syndicated loan in about three months, which was
\nquite a short time by industry standards.<\/p>\n
KPC will use the $385 million loan to refinance the debt
\narising from the acquisition of the firm by Bumi from Rio Tinto
\nand BP. The debt is actually due three years from now, but KPC
\ndecided to refinance the debt in order to cut costs.<\/p>\n
The new loan, which has a grace period of 2.5 years, has an
\ninterest rate of 4 percent above the London inter-bank offered
\nrate (Libor) or about 6 percent at present. In comparison, the
\nold loan had a interest rate of 12 percent. This will allow KPC
\nto save interest costs of $25 million per year.<\/p>\n
\"The signing of the agreement is another important step in
\nstrengthening our balance sheet and enhancing our financial
\nefficiency,\" Bumi's president Ari S. Hudaya said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kpc-receives-largest-loan-since-1997-economic-crisis-1447893297",
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