Indonesian coal miner Bumi gets lender approval for CIC deal

JAKARTA, June 11 Wed Jun 11, 2014 1:22am EDT

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JAKARTA, June 11 (Reuters) - Indonesian coal miner PT Bumi Resources said on Wednesday its lenders had agreed to close a crucial debt-to-equity swap with Chinese sovereign wealth fund CIC, enabling it to pay the coupon on its 2016 bonds.

In October, CIC agreed to convert the $1.3 billion debt it was owed by Bumi Resources into stakes in the Indonesian company and associated subsidiaries.

Bumi, which is controlled by the Bakrie Group, has $300 million bonds maturing in 2016 with a coupon rate of 12 percent, according to Thomson Reuters data. The company had said it needed consent from its lenders for the closure of the CIC transaction and payment of the 2016 coupon.

"PT Bumi Resources Tbk wishes to inform its stakeholders that all consents from lenders to close the CIC transaction have been confirmed and, accordingly, the outstanding coupon against its 2016 bonds have been paid today within the cure period," Bumi said in a stock exchange filing.

Bumi shares were suspended by the Indonesian Stock Exchange before the announcement. Both its 2016 bonds and 2017 bonds were trading unchanged, having moved up from their all time lows struck in May.

Bumi Resources, Asia's biggest thermal coal exporter, had its debt rating downgraded last year on concerns over liquidity constraints faced by the group and the financial pressure of weak commodities markets

Some traders said the approval of the CIC deal and the coupon payment did not erase their concerns about Bumi's liquidity.

"Bumi has been funding its aggressive expansion with short-term loans. When the loans are due, they often do not match the company's cash condition," said Irvin Patmadiwiria, president director of Lautandhana Investment Management.

"But even with the announcement, there are still concerns about Bumi's cash structure to fulfill its other obligations." (Reporting by Fathiyah Dahrul and Fransiska Nangoy in JAKARTA and Umesh Desai in HONG KONG; Editing by Miral Fahmy)

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