Bumi gets $404 loan to close deal
Fitri Wulandari, The Jakarta Post, Jakarta
Coal mining company, PT Bumi Resources said it had received loans amounting to US$404.5 million from international lenders to help finance its acquisition of giant coal miner PT Kaltim Prima.
Bumi's president director Ari Hudaya confirmed in a press conference on Monday that Singapore's United Overseas Bank (UOB) and Credit Suisse First Boston (CFSB) provided a combined $318 million to Bumi.
Australia's Macquarie Bank Ltd. provided $46 million and Leighton Financial International around $40 million, Ari said.
The loans carry a two-year to five-year term. United Overseas Bank and Renaissance Capital act as arrangers for the loan.
As for the remaining $56 million, Bumi would obtain the funds by issuing short term and long term notes.
Bumi completed on Friday the acquisition of KPC from Anglo- American energy firm BP Plc and Anglo-Australian mining giant Rio Tinto Plc. for $500 million, which includes assumed debt.
BP and Rio Tinto, through overseas holding companies, equally owned the entire stake at KPC.
Bumi paid initial payment of $40 million to BP and Rio Tinto in July this year while the remaining $460 million is to be paid by Oct. 10.
KPC currently produces between 16 million and 18 million tons of high quality coal, some 93 percent of which goes to export markets in Europe and Asia. The company generates an average of $450 million in revenue per annum from the exports.
Bumi also promised to go ahead with the sale of 51 percent of its stake as stipulated in the coal agreement with the government.
"We will follow the government regulations and we are waiting for a decision from the government" Ari remarked.
KPC, which operates a giant coal mine in Sangatta, East Kuta regency, has been entangled in a legal dispute with various parties on the sale of its 51 percent stake.
Under the coal agreement with the central government, BP and Rio Tinto, the former owners of KPC, had to divest a 51 percent stake in the firm to local investors.
But the divestment program has been drawn out over several years.
Last year, the government decided that 31 percent of KPC's shares should be sold to the East Kalimantan administration and 20 percent to state coal mining firm PT Tambang Batubara Bukit Asam (PT BA).
It was also agreed that 100 percent of KPC's stake was valued $822 million.
The deal with Bumi had angered the government as it was made when a government team set up by the Office of the State Minister for State Enterprises was finalizing the divestment of the KPC stake to the East Kalimantan administration and to BA.
Ari said so far, there had not been any talks with the government over the divestment issue.
"Thus, we don't know whether to maintain 31-20 percent split and to keep the price at $822. We haven't had talks with the government," he said.
Ari added the price for the majority stakes will be determined based on the current coal price in the market as well as KPC's cash flow.
In addition, Bumi also announced the new board of management for KPC. Ari will replace Noke Kiroyan as KPC's president director. Bumi's finance director Eddie J. Soebari and Kenneth Ferrel both will become KPC directors.