Borneo to close Bumi deal next week, tighten your seatbelt!
PT Borneo Lumbung Energi is on the road to close the Deal of The Year, the US$3.2 billion acquisition of two coal mining companies PT Kaltim Prima Coal and PT Arutmin Indonesia, sometimes next week amid concerns of equity part of the deal.
As Credit Suisse is closing the gap for US$2.1 billion syndicated loan to finance the deal at the time of losing appetite on Indonesian offerings due to the increasing Fed rate, Singapore's United Overseas Bank (UOB) might be the ultimate winner of the deal.
According to Reuters (June 22), the term loans raised by Credit Suisse, including a 5-year US$1 billion senior loan, a 6-year US$600 million senior loan and an 8-year US$500 million junior loan. The US$2.1 billion loan marked the biggest overseas borrowing by an Indonesian firm since the 1997/98 Asian financial crisis, Reuters wrote.
Under such structure, Borneo was supposedly raise US$1.1 billion equity. And, again according to Reuters, United Overseas Bank (UOB) would provide up to 70 percent of the total equity through an exchangeable bond. No information available on who provides the remaining 30 percent despite reports of Bakrie Family's support to Borneo of US$200 million.
So, in total, the loans (raised by Credit Suisse + UOB) provide up to 90% of the financing for Borneo. The question is can Borneo serve such a huge debt? Those in the senior loans category and UOB's exchangeable bond would surely be served first whenever Borneo defaulted payments. How about the junior loan? Well, BE A MAN!
As Credit Suisse is closing the gap for US$2.1 billion syndicated loan to finance the deal at the time of losing appetite on Indonesian offerings due to the increasing Fed rate, Singapore's United Overseas Bank (UOB) might be the ultimate winner of the deal.
According to Reuters (June 22), the term loans raised by Credit Suisse, including a 5-year US$1 billion senior loan, a 6-year US$600 million senior loan and an 8-year US$500 million junior loan. The US$2.1 billion loan marked the biggest overseas borrowing by an Indonesian firm since the 1997/98 Asian financial crisis, Reuters wrote.
Under such structure, Borneo was supposedly raise US$1.1 billion equity. And, again according to Reuters, United Overseas Bank (UOB) would provide up to 70 percent of the total equity through an exchangeable bond. No information available on who provides the remaining 30 percent despite reports of Bakrie Family's support to Borneo of US$200 million.
So, in total, the loans (raised by Credit Suisse + UOB) provide up to 90% of the financing for Borneo. The question is can Borneo serve such a huge debt? Those in the senior loans category and UOB's exchangeable bond would surely be served first whenever Borneo defaulted payments. How about the junior loan? Well, BE A MAN!
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posted by yosef at 12:02 PM
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