PT Bumi Resources Minerals Tbk (“BRMS” or “the
Company”) reports today that its parent company, PT Bumi
Resources Tbk (“BUMI”) is converting its Rp 4.95 trillion
(approximately US$ 546 million) mandatory convertible
note (“MCN”) into equity ownership in BRMS at the
conversion price of Rp 670 / share. Consequently, BRMS
issues 7.4 billion new shares in the name of BUMI for the
MCN settlement.
Kenneth Farrell (CEO of BRMS) said,” In December 2010, we
used part of the initial public offerings proceed to repay the
US$ 148 million loan facility from the Bright Ventures Pte
Ltd. Therefore, the US$ 546 million MCN settlement will
further improve BRMS’ debt to equity ratio to 0.1x. We are
practically running the Company at zero debt level.”
Yuanita Rohali (CFO of BRMS) added, “Our Company’s
balance sheet has been de-leveraged significantly. This
leads to reduced interest expenses, which means we have
more free cash flows to be allocated for operations. We
hope to monetize our assets within the expected time
frame.”
The MCN conversion will increase BUMI’s stake in BRMS
from approximately 82% to roughly 87%. Consequently,
diluting the market free float from 18% to 13%. However,
assuming the warrants are fully exercised at Rp 700 / share
in the next 24 months, the market’s free float will increase
to approximately 20%; therefore, diluting BUMI’s stake in
BRMS to 80%. BRMS is expected to receive incoming fund of
US$ 171 million from the fully exercised warrants (at strike
price of Rp700/share) between June 2011 and December
2012.