Indonesia's Bumi to Raise $600m by Issuing Notes

Indonesia's largest coal producer, PT Bumi Resources Tbk, plans to raise $600m by issuing medium-term notes to help fund a share buyback plan, an arranger for the deal said on Monday.

Wim Al Fatih, president director of Asia Kapitalindo, one of the arrangers, said the notes will be issued in both dollar and rupiah terms and will offer a 20% coupon for rupiah funds and 15% for dollars.

"We are in the book-building process. We have some interest coming in," Al Fatih told Reuters . "This is part of Bumi's buyback programme. The purpose of the buyback could be to settle the repurchase agreements in Bumi's shares."

Dileep Srivastava, corporate secretary of Bumi Resources, declined to comment on the plan.

Bumi Resources announced last week it planned to buy back 17% of its outstanding shares through a combination of internal funds and available loans.

Bumi shares were off 9.5% at 1,050 rupiah as of 06.55 GMT on Monday, despite the announcement that the company will spend over $700m on the share buyback.

The buyback plan came after Bumi shares plunged nearly 10% in each of six sessions after a month-long trading halt was lifted on 6 November on worries about margin trading and the health of its main shareholder, the Bakrie Group.

Since the trading halt was removed, Bumi's shares have more than halved, and the stock has plunged nearly 90% since a mid-June peak.

By Andreas Ismar, Reuters