Jan 14, 2011

Borneo Energi pays Rp2.5 trio debts

Hard coking coal miner, controlled by Indonesian businessman Samin Tan, PT Borneo Lumbung Energi & Metal Tbk (BORN) has paid Rp2.50 trillion loan facilities to three creditors.
In a formal statement submitted to Indonesia Stock Exchange (IDX) today, the company has utilized the net proceed of initial public offering (IPO) worth Rp4.92 trillion to pay the facilities.
Borneo has paid Rp1.16 trillion loan facility to PT CIMB Bank Niaga Tbk, Rp600 billion to PT Sinar Mas Sekuritas, and Rp740.89 billion to Raiffeisen Zentralbank Osterreich AG (RZB Austria) Singapore Branch.
Borneo Energi has also used Rp421.27 billion of the proceed to buy heavy equipments to ramp up installed production capacity to 5 million tons by 2H 2011 from currently of 3.6 million tons.
Borneo estimated to post 1.65 million tons sales volume with average selling price of US$185 million per ton by end of last year.
Referring to the indicators, Borneo Energi is estimated to post US$305.25 million revenue or Rp2.76 trillion in 2010. In a morning note released by PT Mandiri Sekuritas today, Borneo Energi also indicated to produce 1.95 million tons coking coal in 2010.
The revenue indication is higher than estimation provided by CIMB Securities at Rp2.56 trillion in 2010. However, Borneo's revenue indication is lower than estimation made by Morgan Stanley at Rp2.96 trillion in 2010.
In a company report published by CIMB Securities on January 5, Borneo is targeted to post Rp2.56 trillion revenue and Rp217 billion net income. Morgan Stanley targets Borneo's 2010 revenue at Rp2.96 trillion with Rp361.1 billion net income.
Mandiri Sekuritas said amid coal price hike, management Borneo Energi has indicated significant higher selling price for 1Q11 shipment at range US$240-US$275 per ton. It exports most of its coal to North Asia with China as the main destination.
It has 3 year agreement with Glencore as its exclusive marketing agent for 2 million tons off take which paying 4.5% fee. For FY11, Borneo aims 3.8 million tons coal production while 2 million tons has been contracted with its Chinese customers with quarterly pricing.

Disclosure: No position at the stock mentioned above.

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