* Hopes to reschedule payment period for $500 mln of debt
* Slices demand forecast from POSCO-Krakatau steel mill
By Fathiya Dahrul
JAKARTA, Oct 16 Indonesia's Borneo Lumbung
Energy & Metal has cut its 2013 coking coal production
target by a third to 3 million tonnes, the chief executive said
on Wednesday, and plans to extend its window to repay a large
chunk of its $795 million debt.
Problems affecting the company's Asmin Koalindo Tuhup (AKT)
mine in Central Kalimantan could mean 2013 production is 1.5 to
2 million tonnes less than was originally forecast for this
year, CEO Alexander Ramlie said at a public meeting with
Earlier Borneo forecast its output of coking coal, used in
the production of steel, to reach 4.5 million tonnes this year
versus 4.2 million tonnes in 2012. In 2014, Borneo hopes to
produce 4 million to 5 million tonnes, Ramlie said.
The forecast shortfall comes after the firm announced a
first-half net loss of more than $111 million on revenues that
had more than halved. Last year the company suffered losses of
Borneo, which currently controls 23.8 percent stake in
London-listed Bumi Plc, is struggling with its
remaining debt worth $795 million from Standard Chartered Plc
The firm hopes to reschedule up to $500 million of its debt,
extending the payment period to seven years from five years
previously, at the same interest rates, Ramlie said.
Borneo also plans to use $200 million it expects to receive
in dividends from Bumi Plc this year, and plans divest a 20
percent stake in its AKT mine to help cover its repayments,
In July Borneo agreed to double its stake in Bumi Plc to
47.6 percent in a deal worth $223 million, via Indonesian coal
tycoon Samin Tan.
On top of Borneo's production and looming debt woes, it may
also have difficulty supplying 2 million tonnes of coal it was
planning to provide to the massive integrated steel mill being
set up in a joint venture between Krakatau Steel and
Korea's POSCO Chemtech Co Ltd in Cilegon, Indonesia.
"Next year we may only be able to supply 600 to 900 tonnes
because the POSCO-Krakatau joint venture will not be fully
operational," Borneo finance director Kenneth Allan said.