JAKARTA (TheInsiderStories) – The coal miner, PT Adaro Indonesia has secured a loan facilities worth of US$400 million to make an early repayments of its total outstanding loans $1 billion, said the spokesman of PT Adaro Energy Tbk (IDX: ADRO). The loan facility will have five years of tenure and will mature on April 23, 2026.
One of the company’ biggest debts is a syndicated loans from 14 international banks which was obtained on August 25, 2014. The loan facilities will mature on August 25, 2021. Until third quarter of 2020, the issuer had made an installment payment of $108 million. Now, the outstanding loan balance of the company is $448 million.
Earlier, the CFO of Adaro, Luckman Lie, the company was able to maintain free cash flow amounted to $630 million and the ratio of net debt to EBITDA was 0.19 times and net debt to equity was 0.04 times. Beside refinances the debt, the coal miner also preparing new line of business, called Adaro Green Initiative.
While, president director, Garibaldi Thohir, said the forms of developing green initiatives included biomass, solar panels, and downstream coal into hydrogen. So far, the company has eight businesses namely Adaro Mining, Adaro Services, Adaro Logistics, Adaro Power, Adaro Land, Adaro Water, Adaro Capital, and Adaro Foundation.
To support the planned, he explained, Adaro prepared $300 million of funds. With these expansion, the operational EBITDA is targeting to reached $900 million. While, the coal production is targeted around 52 – 54 million tones (MT) of coal with a consolidated strip ratio of 4.8 times.
Last year, the coal miner posted operating revenues of $2.53 billion, a 27 percent decreased from 2019 due to lower average selling price and sales volume. The miner recorded a 6 percent decreased in production volume to 54.53 MT of coal or slightly higher than the revised 54 MT of coal.
In detail, the unit, Adaro Indonesia produced 46.75 MT of coal in 2020, down 9 percent compared to 2019. Then, total coal production of Balangan Coal Companies recorded at 4.58 MT of coal, fell by 8 percent in annual basis. Then, Adaro Metcoal Companies produced 1.88 MT of coal, rose by 72 percent from 2019.
While, Mustika Indah Permai 1.31 MT of coal and Kestrel Coal Mine produced 5.66 MT of coal and sold 5.97 MT of coal or lowered 16 and 9 percent, respectively. Other unit, PT Saptaindra Sejati’ coal production volume was also falling 16 percent to 41.48 MT of coal.
Adaro has announced the construct a new 400 megawatts coal-fired power plant in Aceh has resumed after being halted early last year because of the COVID-19 pandemic. The $600 million project is being developed by a consortium composed of China’ Datang Overseas Investment, PT PP Energy, and power services company, PT Sumberdaya Sewatama.
Its scheduled the project to be completed in late 2023 and begin commercial operations in 2024. The power plant is expected to consume at least 1.2 MT of coal per annum and 90 percent of which will be sourced from Kalimantan.
The management of Adaro said the construction was halted because of the pandemic. The project was originally scheduled for completion in 2021 but has been delayed by land issues and other legal constraints. The plant will operate as a base-load facility and to alleviate electricity shortages in the Aceh Jaya, West Aceh, Southwest Aceh, and Nagan Raya areas.
The international rating agency, Fitch Ratings, has estimate that the performance of domestic coal mining companies will improve in 2021, in line with the improvement in coal prices. In addition, the coal sales volume of Indonesian mining issuers is also predicted to increase, which will also support a slight increase in the credit metrics of each issuer.
Fitch assumes that Indonesia’ coal price will recover 4,200 kcal calories in 2021 to $32.5 per ton compared to 2020 at $27 per ton. Price improvements are also starting to appear at the end of 2020 as estimated.
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