Sep 23, 2009

Bumi seals US$1.9 billion cash from CIC

The biggest holding firm of two coal miners in Indonesia, PT Bumi Resources Tbk, had sealed US$1.9 billion (Rp19 trillion) cash from Chinese Investment Corporation (CIC), a sovereign wealth fund, before Ied Mubarak last week.
An executive familiar to the matter said by injecting deluge of cash to the biggest coal company under Bakrie Grup, CIC is in vanguard of some Bumi's operationals. "CIC has the first right on Bumi's operationals in the future. I can't explain in detail," an executive said yesterday.
CIC is interested to buy both bonds and warrants issued by Bumi totalling US$1.9 billion. The wealth fund and Bumi are scheduled to announce the deal completion today at 3.00 PM (Jakarta time). Bumi is helped by Samuel International, a local investment bank founded by Miming Satyono, while Deutsche Bank advises CIC.
Former banker Goldman Sachs, Arif Sidarto, is the only investment banker behind the deal. He, who had legal battle againts Komisi Pengawas Persaingan Usaha (KPPU) related to very large crude carrier (VLCC) and PT Pertamina in 2004, has joined Samuel International early this year. But, less than a year working for Samuel, Miming allows Arif in charge important positions. He is now managing partner and head of investment banking in Samuel International.
CIC-Noble deal
CIC bought 14.5% stakes in Noble Group for US$850 million as well, allowing Chinese Government investment arm more exposure to global commodities markets. Noble is the only major global commodity trading house, a fierce contender for Glencore. Noble said in a statement it had agreed to sell 573 million shares to CIC at S$2.1137 per share, an 8% discount to its last traded share price of S$2.30.
CIC is also weighing to put money into Mongolian iron-ore miner owned by Hong Kong's Lung Ming Investment Holdings as well. CIC will buy US$300 million convertible bonds of Lung Ming Investment. Lung Ming, which is to go public next year, steers 53% stakes in the operator of the Eruu Gol iron-ore project in Mongolia, as reported by Wall Street Journal.
The fund is in talks to acquire a stake in US power-plant developer AES. Chinese companies have stepped up overseas investment. According to data provider Dealogic, Chinese firms have invested US$16.7 billion to acquire stakes in steel companies and miners, up from $3.6 billion in 2007.

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