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Bumi subsidiary to gain big from NFC deal: Analyst
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A trading floor of Indonesia Stock Exchange (IDX) building. (JP/Wienda Parwitasari)
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ublicly listed mining company PT Bumi Resources Minerals (BRMS) will experience an important boost in its financial performance should it seal a deal to sell 51 percent of shares in PT Dairi Prima Mineral to China Nonferrous Metal Industry’s Foreign Engineering and Construction (NFC), an analyst has suggested.
BRMS, a subsidiary of Indonesia’s largest thermal coal miner PT Bumi Resources, currently holds 80 percent majority stake in Dairi Prima, which operates underground lead and zinc mines in North Sumatra with total resources of 25 million tons of ore.
“Through the joint investment with China NFC, BRMS will be able to repay its debts from Credit Suisse worth US$90 million and get internal cash to develop [subsidiaries] Dairi Prima, PT Gorontalo Minerals and PT Citra Palu Minerals,” Samuel Sekuritas analyst Sharlita Malik said Friday in a note.
(Read also: Bumi Resources finally obtains effective statement to restructure debt)
BRMS will also see an improved financial situation after it restructures debts worth $286.1 million to its various creditors.
Under the debt restructuring scheme, slated for implementation in the third quarter of this year, BRMS plans to issue 36.75 billion new Series B shares priced at Rp 84 (1 US cent) apiece with a total value of $232.6 million.
Then, BRMS’ debts worth $191 million coming from Singapore-based management consulting firm Wexler Capital and 1st Financial Company Limited will be converted into shares. Moreover, another $41.15 million in shares will be allocated to 12 different service providers.
BRMS saw its share price fall by 9.6 percent to Rp 66 apiece from July 3 to July 21. (hwa)
