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Bumi Resources working out debt restructuring plan

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World Coal,

Bumi Resources put forward to creditors a revised debt restructuring plan that would take into account reduced cash flows – a consequence of low coal prices. Yet, this plan failed to prevent the company’s bonds dropping to a record low.

In a stock exchange filling on Monday, the company indicated its total outstanding debts were $3.984 billion owed to creditors, including China Investment Corp., China Development Bank and bondholders.

The Indoensian miner’s plan aimed to convert $1.495 billion of loans and bonds into a 32.5% equity stake in Bumi, according to the stock exchange filing. A sovereign wealth fund China Investment Corp. and China Development Bank to swap $780 million of debt with shares in Bumi and unlisted units would also be needed.

It is reported that Bumi has said it can only sustain a total debt of $1.2 billion – less than half of its $4 billion debt load – as coal prices further declined to $55.45 on Monday.

The company intends to hold a meeting of all creditors to discuss the revised proposals and projects it will reach a framework agreement by mid-October. It intends to implement the plan under Indonesian restructuring law.

Edited from various sources: Reuters, Bloomberg by Harleigh Hobbs

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