PT Bumi Resources Minerals Tbk (BRM), wholly owned subsidiary of Indonesia's largest thermal coal miner PT Bumi Resources Tbk (BUMI), plans to unload 4.32 billion shares or 25.53% stake at the nominal value of Rp625 per share during the initial public offering (IPO) scheduled on December 2 2010.
In the IPO prospectus published today, Bumi Resources Mineral is also aiming to issue 2.88 billion series I warrants to share holders for free. A shareholder holds three BRM shares has rights to obtain two series I warrants. Warrant holders could exercise their rights starting from June 2 2011 until November 30 2012.
Along with Bumi Resources Minerals IPO, Bumi Resources, as holder of mandatory convertible notes, will convert the notes into BRM shares at 5% premium above the IPO price in the next 3 months after listing scheduled on December 2 2010.
PT Danatama Makmur and Nomura have been mandated by Bumi Resources Minerals as joint lead underwriters with full commitment.
Bumi Resources Minerals will use US$148 million of the IPO proceed to settle debt facility of wholly owned subsidiary Calipso Investments Pte Ltd to affiliated creditor dubbed Bright Ventures Pte Ltd.
Bumi Resources Minerals has used the US$150 million loan facility from Bright Ventures to support working capital and capital expenditure at its subsidiaries such as Bumi Mauritania SA, Herald Resources Ltd, PT Citra Palu Minerals, and PT Gorontalo Minerals. The loan charges an annual interest rate of 10%.
Based on the loan agreement signed between Calipso and Bright Ventures on May 26 2010 and amended on September 1 2010, Calipso is obliged to pay the loan facility in 36 months or 3 years, and 5 days after BRM IPO. The IPO must be conducted on December 7 2010.
The remaining of the IPO proceed will be used as additional capital expenditure of Bumi Resources Minerals and subsidiaries.
Bumi Resources Minerals requires US$240 million capital expenditure to develop several projects such as Dairi (led and zinc) of US$100 million, Mauritania (iron ore and phosphate) of US$40 million, Gorontalo (copper and gold) of US$35 million, Palu (copper and gold) of US$30 million, and Liberia of US$35 million.
BRM needs US$275 million total capital expenditure (capex) in 2011 in a bid to develop the 5 projects above. Dairi project requires US$100 million, US$50 million for Mauritania, US$70 million for Gorontalo, US$50 million for Palu, and US$5 million for Liberia project.
Bumi Resources Minerals posted Rp1.35 trillion short term debt to affiliated party and Rp2.51 trillion long term debt. In total, BRM is burdened by Rp3.86 trillion debts.
Disclosure: No position at the stock mentioned above.
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