Bumi 'Worthless' Resources
Below are comments of various investment bankers on the collapse of PT Bumi Resources Tbk US$3.2 billion divestment of KPC and Arutmin to PT Borneo Lumbung Energi.
Question: what kind of future Bumi would have?
Answer: Bumi has window of about two months to sell the coal assets at a lower price. After that, KPC operations will collapse and the coal assets will become unsellable. Then Bakrie group will have no more cash cow.
Q: Do you think someone would be able to buy the assets?
A: It's too overwhelming now. Someone should persuade 10 banks & hedge funds who are already inside the Credit Suisse First Boston (CSFB) US$800 million to roll into some kind of Mezzanine, bring in three or four banks to lend an additional US$600 million, and assemble another US$1 billion from several investors...
Q: Even so, that guy would face similar problems with Renaissance?
A: The buyer has to restructure the contracts with Thiess, PAMA, Glencore and Mitsubishi which are sucking out all the cash. It's all too much, nobody will consider it's worth all that pain and effort...
Q: But Bumi management said, they're gonna sell minority shareholding, continue the divestment to guys like Mitsubishi?
A: I don't think so. I think Bumi, again, trying to fabricate some positive news to lift the share price. They have nothing left to offer to Mitsubishi. Nothing left to offer anyone, except the whole thing in one go...
Q: So, what would happen with Bumi shares once JSX lift the trading suspension?
A: Guess yourself.
Q: By the way, what will happen with US$200 million Willow Finance Eschangeable Bond, exchangeable into majority shares of Bumi Resources shares in September mostly held by hedge funds? What will they do?
A: No idea. Tighten your seatbelt!
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Question: what kind of future Bumi would have?
Answer: Bumi has window of about two months to sell the coal assets at a lower price. After that, KPC operations will collapse and the coal assets will become unsellable. Then Bakrie group will have no more cash cow.
Q: Do you think someone would be able to buy the assets?
A: It's too overwhelming now. Someone should persuade 10 banks & hedge funds who are already inside the Credit Suisse First Boston (CSFB) US$800 million to roll into some kind of Mezzanine, bring in three or four banks to lend an additional US$600 million, and assemble another US$1 billion from several investors...
Q: Even so, that guy would face similar problems with Renaissance?
A: The buyer has to restructure the contracts with Thiess, PAMA, Glencore and Mitsubishi which are sucking out all the cash. It's all too much, nobody will consider it's worth all that pain and effort...
Q: But Bumi management said, they're gonna sell minority shareholding, continue the divestment to guys like Mitsubishi?
A: I don't think so. I think Bumi, again, trying to fabricate some positive news to lift the share price. They have nothing left to offer to Mitsubishi. Nothing left to offer anyone, except the whole thing in one go...
Q: So, what would happen with Bumi shares once JSX lift the trading suspension?
A: Guess yourself.
Q: By the way, what will happen with US$200 million Willow Finance Eschangeable Bond, exchangeable into majority shares of Bumi Resources shares in September mostly held by hedge funds? What will they do?
A: No idea. Tighten your seatbelt!
Labels: Bakrie, Bumi Resources, COAL, CSFB, MITSUBISHI
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posted by yosef at 10:32 PM
1 Comments:
Lapindo, lapindo, the Bakrie's will need cash for this blow out, don't tighten your seats belts undo you seat belt and get out of the plane before it crashes below the ground, anyone seen the Busang bloke?
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