May 25, 2010

Bumi to repay US$500 million debt

PT Bumi Resources Tbk (BUMI) in a press statement today that the company aims to reduce US$1 billion of debt in the next 12 months.
Bumi today announces that it has revived its intent to issue non-preemptive shares and added this to the agenda to be included in its upcoming extraordinary meeting of shareholders which is now due to be held on June 24, 2010.
"We submitted the agenda yesterday to the regulators. Essentially, this is the first step in a series of debtcutting moves to take place over the next 12 months, as we have earlier announced to the market and the public at large," says Dileep Srivastava, BUMI Senior Vice President of Investor Relations.
As per regulation, the non-preemptive issue allows the company to issue new shares to a maximum of 10% of the total outstanding shares of the company with price at an average of previous 25-day trading closing price before the announcement date.
Based on the regulation, the exercise price of non-preemptive rights is around Rp2,328 per share. Bumi will use the proceed to repay high cost debt of US$500 million, which is from China Investment Corporation.
"This deleveraging move will strengthen the company's fundamentals and serve to increase shareholders’ value, he said.

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