Feb 23, 2011

Saptaindra boosts OB & coal production

Coal contractor PT Saptaindra Sejati (SIS), wholly owned subsidiary of PT Adaro Energy Tbk (ADRO), has aggresively set target of overburden removal (OB) and coal production to rise 48.34% and 50.78% respectively this year.
SIS Finance Director Christina Hiu said the coal contractor aims to reach 190 million bank cubic meter (bcm) of overburden removal this year from 128.08 million bcm.
"For coal production, we set 24 million tons-25 million tons this year from 16.58 million tons last year," she told Insider Stories today.
According to her, in line with the target, Saptaindra plans to jack up overburden removal and coal production volume in existing contracts, including its affiliated coal miner PT Adaro Indonesia, which is also subsidiary of Adaro Energy.
Adding to that, Saptaindra also sets a higher of capital expenditure (capex) this year to US$150 million. "We will use the capex to buy heavy equipments and working capital."
Saptaindra, she said, plans to use part of a US$400 million of bank loan facility to underpin the capex and working capital.
"We will use US$220 million of the facility to pay our existing debt and the remaining is intended to fulfill the capex and working capital," Christina said. 
SIS just secured US$400 million loan facility on February 18 2011. Mandated lead arranges for the 7 year loan are PT Bank Mandiri Tbk, Singapore branch, HSBC, Oversea-Chinese Banking Corporation Ltd, PT Bank UOB Buana, DBS Bank Ltd, Sumitomo Mitsui banking Corporation, The Bank of Tokyo-Mitsubishi UFJ Ltd, Jakarta branch, PT ANZ Panin Bank, Credit Agricole Corporate and Investment Bank, and Standard Chartered Bank.
Lead arrangers for the loan are Chinatrust Commercoal Bank Co Ltd, Singapore branch, Societe Generale, Singapore branch.
Facility and security agents for the loan are HSBC and Bank DBS Indonesia. The loan, charging Libor+applicable margin, is guaranteed by Adaro Energy.
2010 Performance
SIS posted a 11% increase in overburden removal last year to 128.08 million bcm. In an official statement recently published Adaro Energy, Saptaindra recorded 114.99 million bcm of overburden removal in 2009.
Howewer, coal mined was to be flat at 16 million tons. SIS mined 16.58 million tons of coal in 2010 from 16.37 million tons.
In the fourth quarter of 2010, SIS recorded a 10% increase in overburden removal to 36.19 million bcm from 33.02 million bcm a year earlier.
Coal production slumped 42% to 3.14 million tons in 4Q10 from 5.45 million tons a year earlier. In 4Q10, SIS’s performance was affected by long periods of wet weather conditions at Adaro’s mines and other customers’ mines.
SIS handled 25% of Adaro Indonesia's coal production, PT Pamapersada Nusantara, Indonesia's largest coal contractor, was responsible for 39% of Adaro Indonesia’s coal.
PT Bukit Makmur Mandiri Utama, wholly owned subsidiary of PT Delta Dunia Makmur Tbk (DOID), and PT Rahman Abdijaya were responsible for 19% and 14% respectively.
PT Rante Mutiara Insani assisted in the development of the Envirocoal-Wara pit and contributed 2% of Adaro Indonesia’s coal production.
Disclosure: No position at the stock mentioned above.

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