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.
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)