Bakrie family's holding company, PT Bakrie & Brothers Tbk (BNBR), will use US$109 million from equity linked notes issuance to refinance some part of debt to Ascention Ltd.
"Some part of the notes will be used to refinance debt to Ascention. There is no additional new loan," said Bakrie & Brothers CFO Eddy Soeparno today
By refinancing Ascention debt, he said, the company will extend the maturity from 1 year to 5 year. Bakrie & Brothers secured two series of loan facilities from Ascention Ltd, Seychelles.
On February 3, 2010, Bakrie received IDR400 billion loan from Ascention or equivalent to US$42,11 million. This loan is secured by 761,90 million shares Bakrie Sumatera Plantations and 50,79 million Bakrie Plantations warrants. The loan is charged with annual interest of 15%.
As of September 30 2010, the balance amounted to Rp310 billion. Bakrie also obtained US$128 million loan from Ascention Ltd on February 5, 2010. The proceeds will be used for investment activities. The loan will be due on March 30 2012 and can be settled by cash or convertible bonds.
Bakrie & Brothers' Director and Corporate Secretary R.A. Sri Dharmayanti said that such note was issued on December 16 2010 after Bakrie signed a subscription agreement with Eurofa Capital Investment Inc.
“The notes mature on 16 December 2015,” she said. In such information disclosure, Bakrie did not specify the future aim of the proceed derived from the notes issuance.
Sri Dharmayanti added, referring to the agreement, the notes holder have the rights to convert the principal amount of the notes into Bakrie & Brothers’ stocks.
Nonetheless, when Bakrie is required to give the stock to the notes holder, the company poses the option to pay at the most US$109 million to the notes holder in order to fulfill the entire or part of such conversion rights.
Besides, the note holders may ask Bakrie to pay the entire or half of such principal amount according to the agreement of equity linked notes. Such notes issuance is not categorized as a material transaction.
Disclosure: No position at the stock mentioned above.