RESTRUCTURING: Indonesia's Bumi slashes size of rights issue as creditors spurn shares

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Bumi had initially planned to sell shares to Axis Bank, Credit Suisse, Deutsche Bank, UBS and China Development Bank to pay off US$275m of its debt. Some of the company’s creditors have declined its offer, Bumi said.

Bumi said on Monday that it had cut its issuance to 15.85bn new shares at Rp250 each, with gross proceeds totalling Rp3.96trn (US$325m). It had previously planned to issue 32.20bn new shares to raise Rp8.05trn.

Of the issuance, Chinese sovereign wealth fund China Investment Corp has already subscribed to 6.9bn Bumi shares worth US$150m. In October last year, CIC agreed to convert part of Bumi’s debt into stakes in the miner and associated subsidiaries.

Bumi said last week that it was cutting its right issue size but was asked by the Indonesian stock exchange to clarify its plan. Its shares were last traded at Rp190 on September 24 and had since been suspended.

“The issue of new shares had experienced undersubscription and the creditors were not willing to accept debt payment in the form of shares,” Bumi said on Monday.

The company’s debts totalled US$4.2bn as of the end of June.

Back to bonds after Bumi battle