Indonesia’s Bumi Resources revises debt restructuring plan

Visual from the company website

Indonesian coal miner PT Bumi Resources Tbk said on Monday it plans to put forward to creditors a revised debt restructuring plan to take into account reduced cash flows as a result of depressed coal prices.

The company has total outstanding debts of $3.984 billion owed to creditors including China Investment Corp, China Development Bank and bondholders, it said in a stock exchange filing.

It said it now plans to hold a meeting of all creditors by Sept. 30 to discuss the revised proposals, which include the conversion of $1.495 billion of debt into a 32.5 percent equity stake in Bumi. It said it expects to reach a framework agreement by Oct. 15.

Coal prices have remained depressed with “significant uncertainties surrounding the prices going forward,” Bumi said.

“As such, to avoid payment default, the availability of cash flow to service debt has been conservatively estimated. This has therefore resulted in the company’s ability to sustain only a limited amount of debt at reduced interest rates,” it said.

Based on a “conservative cash flow forecast”, the company said it is only able to sustain a total debt of $1.2 billion, to be retained as “new senior secured facility”.

If Bumi were to go bankrupt the company would likely lose its contracts to mine coal, and this would result in little or no recovery for creditors, it said.

Bumi is part of the heavily indebted Bakrie Group, a mining-to-plantations conglomerate.

Bumi’s shares are now trading at the minimum 50 rupiah ($0.0034) on the Indonesian stock exchange, a fraction of their peak of 8,750 rupiah hit in 2008.

($1 = 14,695.00 rupiah) (Reporting by Eveline Danubrata; Editing by Kenneth Maxwell, Greg Mahlich)

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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