Moody's Investors Service has downgraded the corporate family rating (CFR) for PT Bumi Resources Tbk (IDX: BUMI) to Caa1 from B3- Photo by the Company

JAKARTA (TheInsiderStories) – Indonesian coal miner, PT Bumi Resources Tbk (IDX: BUMI) confirms that a Contingent Value Rights (CVRs) payment worth US$100 million occurred on June 11. Based on the announcement, the CVRs program was submitted to the Singapore Stock Exchange on Wednesday (06/12).

According to Dileep Srivastava, Director & Corporate Secretary at BUMI, the CVR will be payable once the aggregate amounts outstanding against Tranche A and Tranche B have been first fully repaid. The miner also confirms that the CVR was provisioned in its full year 2017 and 2018 audited accounts and there will be nil impact on the Profit & Loss statements in the future.

Under the CVR Trust Deed, a payment program will be deemed to have occurred if prior to the Final Maturity Date and the average Benchmark Price has been in excess of US$70.00 per metric ton for a period of 18 consecutive months after the issue date.

The Benchmark Price is currently defined as “FOB Newcastle 6,300 kcal/kg GAR 7-45 day coal price as published on the Platts Coal Trader International under the heading “Australia”.

Then, pursuant to the terms of the CVR Trust Deed, the Initial Redemption Date for the principal amount of the CVRs will be the fifth Business Day of the calendar month immediately, following the date falling one month after the date on which the program notice is delivered.

Last year, BUMI made a deal with some of its creditors to solve company’s debts issue. In the agreement, the company must issue $1.99 billion new shares as a new secured facility that consists of three tranches. The tranches A and B facilities valued $600 million respectively while trance C is $406.9 million.

In September 2018, BUMI holds $53.99 million short-term loans, unchanged from its position in the last of 2017. Meanwhile, it has $212.37 million capital deficiency.

In the first quarter (1Q) of 2019, the controversial Bakrie-owned company felt other gloomy days. Its profit slashed almost half to US$48.44 million, from $90.15 million a year ago.

The disconcerting result impacted by its falling revenue, share in net income of associates and joint ventures, and interest income. Other than that, Bumi Resources also suffered foreign exchange loss for $865,511, while previously it gained forex profit.

The coal miner revenues also declined by 24.58 percent to $234.15 million. Among all posts, domestic coal sales fell the deepest by 28.22 percent. Furthermore, export sales decreased by 19.91 percent, while consultation services jumped by 52.79 percent.

It seems that BUMI is still a long way to reach its target. This year, the company aimed to gather $5 billion revenue. But in the first quarter, its revenue is not even 5 percent of the target.

In the first quarter financial report, Bumi Resources could manage its debt stable, as its liabilities recorded at $3.34 billion, decreased very slightly compared to the same period last year. Meanwhile, through its subsidiary PT Bumi Resources Mineral Tbk(IDX: BMRS), Bumi still holds US$53.99 billion short-term loan from Wexler Capital Pte. Ltd.

Bumi Resources Mineral received $100.96 million loan from Credit Suisse AG and Wexler Capital Pte. Ltd in 2016, with 10 percent interest rate and 2 years maturity. Considering the impossible condition to fulfill the agreement, Wexler filed a lawsuit in 2017.

To realize the peace agreement Bumi Resources and Wexler agreed to first convert a portion of the loan into 15.98 billion Series B shares. Now, the outstanding balance of the Wexler loan is amounted to $53.99 billion, by the unit.

Besides, the miner has $145.39 million trade payables to third party, fell from $165.51 million. Moreover, the trade payables to related party was $1.66 million, jumped from $355,157. Then, the miner’ current maturities of long-term liabilities recorded at $110,671.

The company’ equity is not big enough to cover all of these liabilities. Bumi Resources has $2.64 billion capital reserves deficit, so its equity in the first quarter is only $554.48 million.

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