Why Bumi Resources need debts?
Just days after it signed the divestment of PT Kaltim Prima Coal and PT Arutmin Indonesia at US$3.2 billion, PT Bumi Resources Tbk signed new loan of US$200 million with Credit Suisse First Boston (CSFB). CSFB also arranged funding for PT Borneo Lumbung Energi which acquired KPC and Arutmin from Bumi.
It's unclear of how much of the US$3.2 billion that supported by loans arranged by CSFB. But sources said Borneo provided US$100 million, Marubeni Corp at US$900 million, and the rest from CSFB arranged loans.
What's weird is the latest US$200 million loan to Bumi to be paid in July 2006 when Bumi would merge with PT Energi Mega Persada (EMP).
I really don't get it. Bumi is expected to get US$2.7 billion from KPC and Arutmin divestment as US$500 million of proceeds will be used to pay Bumi's debts. Surprisingly Bumi said the it would use the US$200 million loanto strengthen its working capital.
Anybody can explain what's going on exactly?
It's unclear of how much of the US$3.2 billion that supported by loans arranged by CSFB. But sources said Borneo provided US$100 million, Marubeni Corp at US$900 million, and the rest from CSFB arranged loans.
What's weird is the latest US$200 million loan to Bumi to be paid in July 2006 when Bumi would merge with PT Energi Mega Persada (EMP).
I really don't get it. Bumi is expected to get US$2.7 billion from KPC and Arutmin divestment as US$500 million of proceeds will be used to pay Bumi's debts. Surprisingly Bumi said the it would use the US$200 million loanto strengthen its working capital.
Anybody can explain what's going on exactly?
Labels: Bumi Resources, COAL, CSFB, Energi Mega Persada, MARUBENI
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posted by yosef at 6:05 PM
2 Comments:
check their financial stats, and forecasted completion date of the deal. what items cant wait until then ?
debt is always one of the cheapest capital available. why? because it's tax deductable, and if you have a lot of cash, you can get a much lower interest rate from debt market.
it's better to have a debt now and later use it for acquisition (because you can lock your debt into a much lower interest cost), instead of buying now and raising debts later.
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