Banpu makes $54m loan to RI coal firm
Banpu makes $54m loan to RI coal firm
BANGKOK (Dow Jones): Thai coal company Banpu PCL on Thursday said it's Singaporean unit has made a US$54 million convertible loan to Indonesia's PT Centralink Wisesa International.
In a filing to the Stock Exchange of Thailand, Banpu said its wholly-owned Banpu Minerals (Singapore) Ltd. unit on March 21 made the loan to support Centralink's bid to buy shares in two companies that operate four coal mines in Indonesia.
The loan carries an interest rate of 2 percent and must be repaid in four years; it can also be converted into shares up to an equivalent of 95 percent of Centralink's share capital.
The loan will be used to purchase shares in PT Indotambangraya Meghah and PT Ganda Upayatama, two companies that - under the joint name of Indocoal - have concessions to operate four coal mines in Indonesia.
If Banpu's loan is converted Centralink shares, the Thai company's coal reserves and marketable coal supply will increase to over 240 million metric tons from its current 60 million tons; its productive capacity would expand to 12 million tons a year from 6.8 million tons now; and the company would be able to provide a greater variety of coal.
Banpu said it currently produces 3 million tons a year of coal at its Jorong mine in Indonesia.
Banpu said the funds for the loan come from reserves earmarked for investment in overseas coal mines, and from the divestment of other assets.
Banpu's Chief Financial Officer Somruedee Somphong told reporters the company's revenues are expected to rise 30 percent in the year ending June 2001 from 4.4 billion baht the year before, mainly on increased coal sales due to the high capacity of its Indonesian mines.
Banpu recently agreed to provide a $54 million convertible loan to PT Centralink Wisesa International, an Indonesian coal company, to fund Centralink's purchase of Indocoal, a group of Indonesian coal companies, from the Indonesian Bank Restructuring Agency.
The loan will carry an interest rate of 2 percent and must be repaid in four years, unless it's converted into shares up to an equivalent of 95 percent of Centralink. If the loan is converted into shares, Banpu's coal reserves and marketable coal supply will increase to over 240 million metric tons from the current 60 million tons.
Banpu's chief financial officer Somruedee Somphong said the conversion of loan into Centralink equity is still pending approval from Indonesian authorities.
She said it could take up to 1-2 years before the company is granted approval to convert its loan.
However, she doesn't think the Indonesian authorities will object to the proposed plan, and there shouldn't be any problem on the conversion issue.