Feb 3, 2012

Berau Coal to issue US$500 mio notes

One of Indonesia's largest coal miner PT Berau Coal Energy Tbj (BRAU) today released a prospectus about issuing notes amounting up to US$500 million which the proceeds will be used for refinancing existing loan from Credit Suisse amounting US$400 million, capex spending and working capital.
As reported by morning notes published by Mandiri Sekuritas today, the coupon is indicated maximum at 9% and paid semiannually. The notes will be listed in SGX-ST and it will subject to EGM approval that will be held on March 6, 2012.  
Based on the recent update from the company, Berau indeed plan to refinance its exisitng loan at lower rate and to get a better covenant from previous facilities.
But there is no clarity yet from the company about this Notes. Based on the Bumi Plc’s latest presentation the existing CS facility’s interest rate is LIBOR + 4.75%. We’ll find out the details further from the company.
Currently, Mandiri Sekuritas has buy rating on the stock. BRAU currently traded at 6.8x FY12 PER.  Disclosure: No position at the stock mentioned above.

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