JAKARTA. PT Bumi Resources Tbk (BUMI) is ambitious to boost its financial performance significantly in this year. Aside of the commodities prices rise, the improvements in the performance of its subsidiaries, namely PT Bumi Resources Minerals Tbk (BRMS) and PT Darma Henwa Tbk (DEWA) will be the mainstays of BUMI to achieve the target.

Director Corporate Secretary of BUMI Dileep Srivastava said, BRMS is targeting to settle as much as US$ 600 million debts in this year. The debts settlement will support BUMI’s efforts to reduce the total debts that have amounted to US$ 3.2 billion.

The BRMS debts’ would be restructured after BUMI getting approval from the shareholders general meeting (RUPS) to issue rights worth Rp 35.1 trillion. BRMS will restructure the debts with the funds derived from the sales of 24% of stakes in PT Newmont Nusa Tenggara.

As information, BUMI will conduct the shareholders’ general meeting today (7/2) to obtain approval for the rights issue. “BRMS’ debts restructuring is one of the strategic priorities. BRMS will also boost the mining productions,” Dileep told KONTAN, Friday (3/2).

He mentioned that BRMS will boost the zinc productions of PT Dairi Prima Mineral. The company will also increase the gold and copper productions from PT Gorontalo Minerals and PT Citra Palu in Sulawesi.

BUMI will swap debt for shares through the rights issue. This corporate action would cut the debt of around US $ 2.6 billion, as well as the interest expense of more than US $ 250 million.

Meanwhile, DEWA is projected to have booked net profits in 2016, Dileep said. The profits are targeted to increase in this year. DEWA eyes for increasing the coal productions from 15.1 million tons in 2016 to 29.1 million tons this year

BUMI is targeting to sell 94 million tons of coal in this year. The company is projected to have sold about 88 million tons of coal in 2016.

Analyst at Binaartha Parama Sekuritas Reza Priyambada assesses that investors are likely to target the price of a share of BUMI at Rp 926. The investors would set the target by considering the transaction volume and the market sentiment.

Recently, BUMI’s shares have been at the consolidation phase. The shares’ prices will rise if the shareholders’ general meeting approves the rights issue with the price of above the market price.

If the price of a BUMI’s share stands at Rp 600-Rp 700 within a month period, the rights issue price may hit Rp 900. However, market participants also need to monitor the profit taking potentials of BUMI’s shares. (Muhammad Farid/Translator)

Editor: Barratut Taqiyyah Rafie