The integrated oil and gas services company, PT Indika Energy Tbk (IDX: INDY) seeks fresh funds from global bond market by issue senior notes up to US$650 million - Photo: Special

JAKARTA (TheInsiderStories) – The integrated oil and gas services company, PT Indika Energy Tbk (IDX: INDY) seeks fresh funds from global bond market by issue senior notes up to US$650 million, said the company on Monday (09/21). The issuer needs “money” to pay its liabilities.

In this issuance, the producer acted as a corporate guarantor and for the underwriter its subsidiaries, namely PT Indika Inti Corpindo, PT Tripatra Engineering, Tripatra Engineers and Constructors, and Tripatra (Singapore) Pte. Ltd., domiciled in Singapore.

This month, its unit PT Indika Mineral Investindo (IMI), has acquired 25 percent of PT Masmindo Resources Ltd., Nusantara Resources Ltd., a listed company on the Australian Stock Exchange, for US$15 million. The Awak Mas gold mine project located in Luwu Regency, South Sulawesi.

After the completion of the phase I of investment, IMI and Nusantara respectively own 25 and 75 percent of the total issued and paid-up capital in Masmindo. End of last year, the miner has expanded into the gold mining by investing around $40 million in the Awak Mas.

This transaction was the company’ step to diversify the business. To realize the planned, Indika has done a non-binding term sheet with Nusantara, PT Petrosea Tbk (IDX: PTRO) and Masmindo. From the agreement, the company will invest $15 million in the first phase and $25 million in the second stage.

Through IMI, the company had invested $456,000 in Nusantara Resources through private placement by acquiring 2.78 million its partner’ shares. The deal made IMI owns 19.9 percent share at the Australian firm. It said, Nusantara Resources used the funds to continue the development of the Awak Mas Project in Toraja, South Sulawesi. The block has an estimated ore of 1.1 million ounces and resources of 2 million ounces.

Beside acquired the gold mining project, Indika through its unit had acquired 15 percent or 2,63 million shares of PT Multi Tambangjaya Utama (MUTU) from Prime Empire Investments Pte Ltd. The value of the transaction worth $9.9 million. As such, 100 percent of MUTU’ share owned by the miner through its two units, PT Indika Indonesia Resources of 85 percent and Indika Capital Investments Pte. Ltd 15 percent.

MUTU has been operating since 2012 and has total assets before the elimination of $69.43 million as of March 31, 2019. While, Prime Empire is an investment company founded in 2010 and based in Hong Kong.

MUTU has a thermal and coal asset in Central Kalimantan, with a concession area of ​​24,970 hectares. It is located around 30 km northeast of Ampah city and about 250 km north of Banjarmasin, South Kalimantan. The company built a coal haul road with a capacity of 3 million tons per year and a barge port with a capacity of 5 million tons per year.

Indika was established in 1982, and the contract will expire in 2023. Estimated coal reserves owned by Kideco are 422 million tons with 50 consumers in 16 countries. The main destination is China and India. Itss coal business in 2012 – 2015 did slow down due to sharply falling prices on world markets but began to crawl up in early 2017.

As a result of the price decline, the company was hit but still managed well by increasing efficiency. The world gold price is in a positive trend. Referring to trade data from Kitco, the world gold price is still at a level approaching the level of $1,930.92 a troy ounce after previously slumping 1.17 percent to $1,906.23 per troy ounce.

In the first quarter of 2020, Indika posted revenues of $641.5 million, dropped by 8.5 percent from previous year at $700.7 million and booked a loss of $21.0 million.

US$: Rp14,600

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