Dairi Prima Minerals Plant in North Sumatera - Photo by Bumi Resources Mineral

JAKARTA (TheInsiderStories) – One the largest coal producer in Indonesia, PT Bumi Resources Tbk (IDX: BUMI) planned to pay off around US$250 million of its Tranche A loan until the end of this year, said the director today (08/28). Until June, the miner has paid $167.5 million of Tranche A loan.

According to the company’ director Andrew Christopher Beckham, next payment in October 2019 with amount$ 22 million. He said, the payment of the debt is very dependent on the price of coal.

In his views, coal prices could increase to around $70-80 per ton during 2019. Beckam stated, the sentiment from the trade war between the United States and China was also increasingly influential on commodity prices, including coal.

Therefore, the company hopes that there is a solution from the trade negotiations that can hoist commodity prices in the third quarter.

The Bakrie Group subsidiary has paid debts of $270.4 million until July 2019. The debts consisted of Tranche A principal debt of $168 million and interest of $102.4 million.

Last year, Bumi Resources made a deal with some of its creditors to solve the company’ debts. 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 $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 in revenue. But in the first quarter, its revenue is not even 5 percent of the target.

BUMI’s management explained that prior to the restructuring in 2017, the company’ debt was valued at $4.3 billion. However, that number shrank $2.6 billion to $1.7 billion after the restructuring process was taken.

Meanwhile, the $2.6 billion debt depreciation was achieved thanks to a number of ways. First, the conversion of $2.0 billion in debt to equity at the price of Rp926.16 per share.

Second, BUMI issues mandatory convertible bonds (MCB) with a duration of seven years. The total MCB emitted was valued at $600 million.

Talking about the company performance, Beckham said he was optimistic that would improve by the end of 2019.

BUMI is targeting production up to 90 million tons of coal in 2019. The amount comes from PT Kaltim Prima Coal 60 million tons of coal and PT Arutmin Indonesia 30 million tons.

Written by Staff Editor, Email: theinsiderstories@gmail.com