JAKARTA (TheInsiderStories) – Indonesian coal miner, PT Indika Energy Tbk (IDX: INDY) increased the share ownership portion directly and indirectly in Nusantara Resources Ltd., (NUS) to 27.75 percent. A gold mining company listed on the Australian Stock Exchange and managed 100 percent of the Awak Mas mining shares, in Luwu, South Sulawesi.
Quoting the disclosure of information released on Thursday (03/12), the share portion of Nusantara Resources had increased along with the company exercising all option rights to in the company based on the share investment agreement on Dec. 12, 2020. The issuer is granted investment option rights of 16.69 million shares at a price of AUD0.35 (US$0.26) a share that has been exercised in November.
Indika has exercised this option with a total investment price of AUD5.84 million together with its other subsidiary, PT Indika Mineral Investindo. The Awak Emas project has estimated reserves of 1.1 million ounces of ore and 2 million ounces of resources in the province with a total investment up to $200 million.
Apart from the option rights in the agreement, the company will also include capital and spend up to $40 million to acquire Nusantara Resources, which will be divided into two stages. In the first phase, the company will invest in a 25 percent stake in PT Masmindo Dwi Area, the subsidiary of the Australian miner, with an investment values of $15 million.
In the second stage, Indika has the right to invest an additional 15 percent of shares in Masmindo with a total investment value of $25 million. With these two stages of equity participation, the company will later become the majority owner of Masmindo with a total ownership of 52.6 percent, directly and indirectly.
Last month, the miner just submitted the amendment of terms and conditions of the its global bond of $575 million with a coupon rate 5.87 percent. The notes issued by Indika Energy Capital III Pte. Ltd., and will mature on Nov. 9, 2024.
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.
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: AUD1.35, Rp14,100
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