Indonesia’s Bumi aims to repay debt, boost output
Reuters, Mon Apr 2, 2007 11:03am BST
JAKARTA, April 2 (Reuters) – Indonesia’s PT Bumi Resources Tbk (BUMI.JK: Quote, Profile, Research) will use proceeds from a $1.3 billion deal to sell coal assets to India’s Tata Power Co. (TTPW.BO: Quote, Profile, Research) to repay debt and boost output, an official at the mining firm said on Monday.
Bumi plans to boost its coal output to 90 million tonnes per year from 60 million currently by 2008, helped by an investment of between $200-300 million, Nalinkant A. Rathod, a commissioner at Bumi, told reporters.
Tata Power signed a deal on Saturday to buy a 30 percent stake in Bumi’s PT Kaltim Prima Coal and PT Arutmin Indonesia, two of Indonesia’s largest coal mines, and a related trading firm.
“From the divestment proceeds, we would use $1 billion to repay our debts,” Rathod said, adding Bumi hoped to finalise the deal by the end of this month.
Rathod said $730 million was debt owed by Bumi’s PT Kaltim Prima Coal and PT Arutmin Indonesia, while $258 million was debt owed to a syndicated group led by Credit Suisse.
Tata Power — part of India’s salt-to-software Tata Group — has been eyeing coal reserves in Australia, Indonesia and South Africa to tie up supplies for planned power plants.
Bumi, controlled by the family of Indonesia’s chief social welfare minister Aburizal Bakrie, has a chequered record of trying to push through deals to sell coal assets.
Last year it failed to sell stakes in the two mines to local investment bank Renaissance Capital for $3.2 billion.
Shares in Bumi closed down 1.5 percent at 1,310 rupiah, underperforming the overall market (.JKSE: Quote, Profile, Research), which was up 1.01 percent.
Entry filed under: bumi resources, coal, coal assets, conspiracy, india, kaltim prima coal, mining boost, tata group india, tata power. Tags: bumi resources, coal, conspiracy, india, mining boost, tata group, tata power.