BUMI announces pricing of US$375 million bond

PT Bumi Resources (BUMI) Tbk announced the pricing of its privately placed US$375 million 5-year 9.25% coupon guaranteed convertible bond due 2014. 

The bonds are expected to be issued by Enercoal Resources Pte Ld, a wholly-owned subsidiary of BUMI, and convertible into existing ordinary shares of BUMI. The bonds are expected to be issued at a 30% conversion premium. Credit Suisse (Singapore) Limited is acting as the sole placement agent for the bonds.

BUMI told investors that concurrent with the issuance and placement of the bonds, the issuer will enter into a cash-settled call spread transaction (Capped Call Option) with an affiliate of Credit Suisse. Under the option agreement, the issuer will purchase call options on the number of shares of the company into which the bonds are convertible.

"If on the expiration date of the Capped Call Option, the market price of the shares is higher than the strike price, then the counterparty (CS affiliate) will pay to the issuer an amount calculated by reference to the difference between the then market price of the shares subject to a cap," BUMI wrote.

BUMI is currently the largest coal producer in Indonesia with coal shipped over 51 million tons last year from two subsidiaries, PT Kaltim Prima Coal and PT Arutmin Indonesia. 

BUMI surged 10.23% today to Rp2425 with 905 million shares exchanged hands, the highest price seen since October 6, 2008. BUMI reached its peak in June 2008 at Rp8550, but then crashed to as low as Rp425 in January 15, 2009. Since then the stock regained grounds and posted 470% gain so far. At Rp2425, BUMI currently has market capitalization of US$4.7 billion.

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