JAKARTA (TheInsiderStories) – Mining services contractor, PT Delta Dunia Makmur Tbk (IDX: DOID), through its subsidiary PT Bukit Makmur Mandiri Utara (BMMU), will issue global bonds worth of US$750 million to pay off the liability. The company owns 99.99 percent of BUMA shares and the rest by Glenn Timothy Sugita.
Based on the prospectus issued on Tuesday (07/07), BMMU stated that the bonds would be listed on the Singapore Exchange Securities Trading Limited. The global debt is neither guaranteed by the company nor by property security rights to the company’s assets and will have a coupon of up to 10 percent which will be paid every six months.
Based on the financial statements as of Dec. 31, 2019, Delta Dunia‘ total equity was recorded at $280.57 million, so the transaction percentage of the company’ total equity was 267 percent.
“Because the total value of the transaction exceeds 50 percent of the company’s total equity, the transaction requires prior approval from the company’ shareholders,” management wrote today.
DOID plans to use the proceeds from the bond issuance after payment for all or part of the company’ obligations reaching $465.6 billion and the remainder for working capital. The total debt to be paid is a debt maturing in 2022 worth $350 million, the MUFG Bank Ltd. facility agreement, and a syndicated loan agreement worth $115.6 million.
The amount to be paid, whether in whole or in part, will depend on the amount of debt securities to be issued in the transaction plan that can be absorbed by the market. Currently, the contractor has total liabilities of $901.34 million, which is short-term liabilities of $257.34 million and long-term liabilities of $643.99 million.
Until the end of 2019, cash and cash equivalents of Delta Dunia amounted to $87.48 million, up 31.3 percent of total cash and cash equivalents in 2018 valued at $66.6 million. The company also did not have a standby investor and would request the approval of the issuance to shareholders at an extraordinary general meeting on July 9, 2020.
On the other hand, management considers the issuance of global bonds to be more profitable compared to funding through bank loans or syndication which generally requires a principal installment.
In detail for BUMA‘ debt, it was stated that this subsidiary had a total debt of $ 709.92 million, with details of debt notes of $ 350 million, MUFG facilities and syndicated loan agreements of $ 115.62 million, long-term debt of $ 1.44 million, and finance leases $ 242.87 million.
–updated on July 11
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