JAKARTA (TheInsiderStories) - An Indonesian consortium led by veteran investment banker Agus Projosasmito is in talks to raise $1 billion of debt to back its bid for control of Newmont Mining Corporation’s copper operations in the country, Bloomberg reported.
The Indonesian consortium also includes Arifin Panigoro, the founder of energy-focused Medco Group, according to the people. The bidding group is seeking to buy a majority stake in local operating company Newmont Nusa Tenggara, people familiar with the matter said in January.
The investor group is in discussions with banks on borrowing $750 million in senior loans and $250 million of mezzanine debt for the asset purchase, said Shiv Dave, founder of Emindobiz, a Jakarta- and Singapore-based boutique firm hired to advise on the debt-raising. About $450 million of equity will be funded by the sponsors upon deal closing, Dave said by e-mail, adding that deal was secured out of Singapore.
Malayan Banking and Societe Generale are among banks that are in advanced talks to provide funds, according to people familiar with the matter. BNP Paribas and another European bank are still doing due diligence on the deal, the people said, asking not to be identified as the information is private. Dave confirmed a major global fund has also committed to provide some of the financing, without giving the name.
Newmont is seeking to sell its local business after Indonesia banned raw ore shipments in January 2014 and put a progressive tax on concentrates, a semi-processed ore that’s shipped to smelters for processing into finished metal. The move is part of a wider policy to boost revenue by turning the country into a manufacturer of higher-value products and encourage construction of domestic smelters and refineries.
Spokesmen for BNP Paribas, Maybank and Societe Generale declined to comment. A receptionist at Projosasmito’s company said he wasn’t in the office, while calls to Panigoro’s office went unanswered.
Newmont Mining chief executive officer Gary Goldberg told a conference February 29 that the company and Sumitomo are in talks with parties who have expressed “serious interest” in the Indonesian mine, though none had yet agreed on final deal terms or secured fully committed financing. A representative for Newmont declined to comment beyond Goldberg’s remarks, while a spokesman for Sumitomo declined to comment.
Rizal Ramli, a coordinating minister overseeing mining in Indonesia, said in November that Panigoro plans to buy 76 per cent of the mine for about $2.2 billion. (*)