JAKARTA (TheInsiderStories) – Unit of coal miner, PT Golden Energy Mines Tbk (IDX: GEMS), has planned to releases global bond for debt refinancing and get a B1 rating from Moody’s Investors Service, its announced on Monday. The proposed senior secured notes to be issued by the unit, Golden Energy And Resources Ltd (GEAR).
The Singapore-based company plans to use the proceeds to redeem all of its outstanding US$150 million notes due 2023 and repay outstanding bank loans at the holding company. GEAR is an energy and resources holding company with investments in coal and gold and 62.48 percent owned by Golden Energy.
Moody’s said, GEAR‘ corporate family rating and stable outlook reflect the solid operating performance of its parent despite challenging conditions and its improving business profile with growing exposure to metallurgical coal and gold in Australia. Other international ventures include an investment in its 60 percent effective stake in Stanmore Coal and gold in the Ravenswood gold mine with private equity firm EMR Capital.
The projections also assume that GEAR will continue to maintain at least a 62.5 percent ownership stake in GEMS, following the 4.5 percent stake sale to comply with the minimum free float requirements needed to remain listed on the Indonesian Stock Exchange. Inline with its diversification strategy, in April, GEAR announced an A$15 million ($11.54 million) investment in North American metallurgical coal producer, Allegiance Coal Limited, via private placement for an approximate 12 percent stake. The transaction is expected to complete by May.
In addition, GEAR‘ 60 percent-owned subsidiary Stanmore announced its acquisition of the Millennium and Mavis Downs Mine from Peabody Energy Australia. This acquisition will be a 50 – 50 joint venture with M Resources.
The purchase consideration comprises of A$1.25 million of cash consideration upfront split equally between Stanmore and M Resources, a royalty agreement capped at A$1.25 million, and superb royalties of up to $3.5 a ton for a maximum of five years payable to Peabody in the event of premium hard coking coal prices staying above $175 per ton.
The upfront cash outlay for the investments in Allegiance Coal and the MMD mine are relatively small, and can be funded via GEAR and Stanmore’ internal cash sources. The investments are also in line with the’ geographic and commodity diversification strategy, helping improve the company’s business profile.
Recently, the issuer has canceled the rights issue which was originally intended to meet the provisions for free float of shares. The director, Suhendra, said on April 24, GEAR as the shareholder has sold 4.5 percent of ownership to Ascend Capital Advisors Pte. Ltd., and has fulfilled the requirement. GEMS had registered the rights issues on Dec. 3, 2020, Dec. 28, 2020, and Feb. 22, 2021.
This year, Golden Energy has allocated a capital expenditure up to $9 million for business expansion. This year, GEAR is preparing to be more aggressive in investing in overseas gold mining businesses. The company intends to increase investment worth A$75 million in gold mine owners in Queensland, Australia, namely Ravenwood Gold Group Pty. Ltd.
This mine has been operating and produced 54,000 ounces of gold as of the end of 2019. This mine is recorded to have 3.74 million ounces of gold resources and 2.60 million ounces of total gold reserves as of Sept. 30, 2020. The miner also intends to expand its core business by including precious metals, base metals and minerals businesses.
Listed on the Singapore Stock Exchange, GEAR is an energy and resources company with investments in coal and gold. Its primary asset is Golden Energy located in Kalimantan and Sumatra.
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