JAKARTA. After the agreement on debt restructuring with the creditors, PT Bumi Resources Tbk (BUMI) plans to accelerate the business expansion of its subsidiary, which involves in mineral mining business, namely PT Bumi Resources Minerals Tbk (BRMS).

Financial Director of BUMI Andrew Bechkam said that BRMS still has potential assets to be develop, such as PT Dairi Prima Mineral that produce tin, as well as PT Gorontalo Mimerals that focuses in gold mining.

Andrew said that BUMI can involve investors to develop the business of BRMS. “There is no agreement so far, but we have seen potential investors, which are interested to develop this business,” he said, Thursday (8/12).

BRMS is trying to reduce debts by selling 24% of its shareholders in PT Newmont Nusa Tenggara (NTT). BRMS obtained US$ 400 million through the activity, and subsequently will allocate the funds to settle its debts to Credit Suisse.

The value of BRMS debts to Credit Suisse reaches US $ 450 million. In 2009, a subsidiary of BRMS, PT Multi Daerah Bersaing (MDB) bought 24% stakes of NTT with a transaction value of US $ 884.6 million. If the value of the sales of that gold mining company shares is lower than the purchase price in 2009, BRMS will post a loss of sales of assets in the income statement.

In 2017, BUMI will also focus on boosting the production capability of coal mining up to 100 million ton. BUMI is targeting to secure a 5%-7% of growth in coal production and sales compared with the realizations in this year. It is projected that the price of coal will increase in average by 30% in 2017.

In the framework of the conversion of debt into shares, BUMI plans to issue as much as 29.1 billion shares. The amount is equivalent to 80% of the issued and fully paid capitals of the company that reach 36.6 billion shares. In accordance with their debt restructuring proposal, the price of a new share is at Rp 926. That price is much higher than the current price of a share of BUMI that stands at Rp 296.

Three new directors Andrew said, after issuing new rights, there will be three new directors and three new commissioners at the board of directors of BUMI that are representatives of the creditors. The number of BUMI’s directors will be seven. In this case, China Investment Corporation (CIC) will appoint a representative as a director. Aside of director, CIC will also appoint a representative as a commissioner. Along with public, CIC will be the largest shareholders of BUMI.

Analyst at Asjaya Indosurya Securities William Surya Wijaya estimated that the prices of mineral commodities are potentially to increase. Therefore, the assets of producers, such as BRMS, can be developed to generate revenues in the next year.

However, William stressed, that requires a certainty in the sale of Newmont’s shares, as well as its impacts to the company. Clearly, the business prospect and the movement of BUMI’s shares will affect BRMS’ shares movement. (Muhammad Farid/Translator)

 

Editor: Sanny Cicilia