Berau Coal finalized loan for Empire Capital bonds

Wednesday, 03/03/2010 00:00 WIB

Berau Coal finalized loan for Empire Capital bonds

Irvin Avriano A.

for Bisnis Indonesia

JAKARTA: PT Berau Coal eventually got bridging loan to pay its debt earlier to the bonds issued by its subsidiary firm, Empire Capital Resources Pte Ltd, worth US$325 million.

The company got bridging loan to pay the bonds but without any detail explanation on the funding resources and other finance actions.

That was unveiled by the rating report from the Fitch Ratings yesterday which revoked the company rating after the early bond payment.

The revoked long term rating from the bond was from B+ level and long term national rating at A (idn) level.

Prior to revocation due to early payment, the rating was deemed rating watch evolving (RWE).

The corporate bond which was issued on December 28, 2009, should have been paid by the company in 2011. but the company planned to pay due to the change of ultimate shareholder.

The rating report also valued the change of shareholders of Berau Coal which could boost up and increase the company rating dealing with the business plan and new funding resource.

Some 90 percent of Berau shares are owned by PT Recapital Advisors through PT Bukit Mutiara.

On 30 November 2009, Recapital won over the acquisition tender of Berau, beating the other contenders, Banpu PLC Thailand, PT Quattro Inti Investama, and Consortium of PT Indika Inti Energy Tbk.

President Director of Recapital Advisors Rosan Perkasa Roeslani when asked last night conceded Berau had earlier payment with bridging loan facility.

Last month, the management of Empire Capital had serious plan to issue US$300 million bond to refinance the previous debt worth US$325 million.

Meanwhile, Moody's Investor Service on February 9 revoked the rating of local currency debt of B1 with stable prospect for Berau. Laura Acres, Vice President Senior Credit Officer of Moody's, said the rating revocation was due to business reason. But she failed to give further details.

The rating was given by Moody's on December 14, 2006 following the completion of US$325 million bond issuance by Empire which was guaranteed by Berau a the holding company.

Berau is the fifth national largest coal exporter and producer. The company operated three active mining in one site in East Kalimantan. The estimated resources of the coal mining are 1.9 billion tons of coal with the planned and proven reserves of 280 million tons.

BErau Coal aims to rise the production volume up to 17 million tons this year or rose 14 million tons as from 2009. The earnings before interest, tax, depreciation and amortization is estimated at US$340 million.

Furthermore, Empire Capital was involved in the fund collection structure for PT Recapital Advisors to acquire 90 percent of Berau shares in December 2009-January 2010 worth US$1.52 billion. (Bisnis/iaa/faa/m04)