PT Indika Energy Tbk (IDX: INDY) has established PT Electra Mobility Indonesia (EMI), an electric motorcycle parts and accessories producer - Photo by the Company

JAKARTA (TheInsiderStories) – Local miner, PT Indika Energy Tbk (IDX: INDY) unit, submitted the amendment of terms and conditions of the its global bond of US$575 million with a coupon rate 5.87 percent. The notes issued by Indika Energy Capital III Pte. Ltd., will mature on Nov. 9, 2024.

“The proposed amendments will require the receipt of legal approval from the majority bondholders,” wrote the management in an information disclosure to the Singapore Exchange on Nov. 24 by adding the bondholders must submit their approval no later than Dec. 4, 2020.

Qualifying bondholders will receive cash compensation of $3 per $1,000 principal amount of the bonds. Indika has appointed Deutsche Bank and Morrow Sodali Ltd., to help the transaction.  Recently, the company also has completed the issuance of debt securities denominated in dollars worth $675 million.

The plan is that the funds from the global bond issuance will be used to refinance $500 million of debt issued by Indo Energy Finance II B.V. The debt security with an interest of 6.37 percent will mature in 2023. In addition, the company also plans to diversify its business outside the coal mining business.

In Oct. 22, Indika issued $450 million with the same interest and maturity. These bonds will mature in 2025. The proceeds also to refinance the debt issued by Indo Energy Finance. The debt securities with interest of 6.37 percent will mature in 2023. 

In addition, the company also plans to diversify its business outside the coal mining business. The issuer’ units acted as guarantor of the global bond issuance like Tripatra (Singapore) Pte. Ltd., PT Indika Inti Corporindo, PT Tripatra Engineering, PT Tripatra Multi Energi, and PT Tripatra Engineers and Constructors. 

The miner has appointed Standard Chartered Bank (Singapore) Ltd., Mandiri Securities Pte Ltd., and Singapore branch of Deutsche Bank AG as joint book-runners and initial buyers of debt securities. Indika also reported, the transaction values exceeds 50 percent of the company’ equity and has received the shareholder approval on Oct. 26, 2020.

The bonds has rating Ba3 from Moody’s Investors Service. The agency also give same rating to the $285 million backed senior secured notes due 2023 issued by Indo Energy Finance. Then, to $265 million backed senior secured notes due 2022 and the $575 million backed senior secured notes due 2024 issued by Indika Energy Capital. 

At the same time, Moody’s has assigned a first-time Ba3 rating to the backed senior secured notes to be issued by Indika Energy Capital. The proceeds from the notes will be primarily used to refinance existing debt of the company. The notes are unconditionally and irrevocably guaranteed by Indika and will rank pari passu with its outstanding US Dollar notes. The outlook remains negative.

It said, the proceeds from Indika‘ proposed US dollar notes issuance, which form part of its $650 million debt raising plans announced in September, will be used primarily to refinance the majority of its US Dollar notes coming due in 2022 – 2023. Part of the proceeds will also be used to invest in non-coal related businesses.

Upon completion of its planned refinancing, which Moody’s views as credit positive, Indika will not have any material debt maturities until 2024. As a result, the miner’ strong liquidity and minimal near-term refinancing risk afford it time to improve its weak credit metrics amid challenging business conditions, including low thermal coal prices.

In order to support earnings, the company has taken steps to reduce operating cash costs at its 91 percent-owned coal mining subsidiary, PT Kideco Jaya Agung, to $32.3 per ton in 1H 2020 from $35.6 per ton in 1H 2019. Its contract mining subsidiary PT Petrosea Tbk (IDX: PTRO) and engineering subsidiary PT Tripatra Multi Energi, are also seeking new contracts to boost their contract order books which have been declining in recent years.

Indika is an integrated energy group listed on Indonesia Stock Exchange, with a market capitalization of around Rp4.8 trillion ($340.42 million) as of Oct. 9. Its principal investment, Kideco, is one of Indonesia’ largest domestic coal producers.

US$1: Rp14,100

Written by Editorial Staff, Email: