JAKARTA (TheInsiderStories) – Bondholders of the the local miner, PT Indika Energy Tbk (IDX: INDY), gave an approval to amend the global bond worth of US$575 million with coupon rate 5.87 percent per annum. Earlier, the unit, Indika Energy Capital III Pte. Ltd., has submitted consent of solicitation for the bonds that will mature on Nov. 9, 2024.
The management revealed 85 percent of the notes-holders has received the term and will receive cash compensation of $3 per $1,000 of the principal amount. To finances the amendment, the coal miner had completed the issuance of dollars worth $675 million in November.
The debt security with an interest of 6.37 percent will mature in 2023. The planned is that the funds will be used to refinance Singapore-based firm. In addition, Indika also plans to diversify its business outside the coal mining business.
In Oct. 22, the company released $450 million of notes with the same interest and maturity. These bonds will mature in 2025. The proceeds also to refinance the debt issued by the unit, Indo Energy Finance. The debt securities have interest rate of 6.37 percent will mature in 2023.
Indika’ 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. It 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 Indika. The notes are unconditionally and irrevocably guaranteed by the group and will rank pari passu with its outstanding US Dollar notes. The outlook remains negative.
The proceeds from the notes, 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 this week, the issuer just signed an agreement with state-owned energy firm PT Pertamina and other coal producer, PT Adaro Energy Tbk (IDX: ADRO), to develop coal gasification into Dimethyl Ether. President director of Indika, Arsjad Rasjid, said the company also plans to diversify its business outside the coal mining business.
In order to support earnings, the miner 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 the first half of 2020 from $35.6 per ton in previous year. Its contract mining subsidiary PT Petrosea Tbk (IDX: PTRO) and the 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.
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