Narrative
Full Description
Project narrative
On February 6, 2012, China Development Bank and PT Bumi Resources Tbk signed a $600 million loan agreement. The proceeds of the loan were to be used by the borrower to repay short term debts to Bank of America, Merrill Lynch, Barclays, and JP Morgan. CDB was the original lender and arranger and Bank of China Jakarta branch was the facility agent. The loan had a maturity of four years and an interest of LIBOR (0.687%, the 6-month average in 2012) + a 6.7% margin. The loan was due 48 months from the date of withdrawal of funds. As a result of PT Bumi Resources defaulting on its repayment obligations to multiple creditors, a petition was filed on April 6, 2016 with the Commercial Court of the Central Jakarta District Court (the “Court”) by Castleford Investment Holdings Ltd. (“Castleford”), a creditor of the Company, for suspension of payments proceedings (Penundaan Kewajiban Pembayaran Utang) (“PKPU”) to be entered into pursuant to the Indonesian Bankruptcy Law. The Court accepted Castleford’s petition on April 25, 2016 and, to avoid liquidation, PT Bumi Resources proceeded to negotiate and present to its creditors and the Court a composition plan (the “Composition Agreement”) pursuant to the terms of the Indonesian Bankruptcy Law. The Composition Agreement was approved by the required majority of the PT Bumi Resources’ secured creditors and unsecured creditors on November 9, 2016 and by the Court on November 28, 2016 pursuant to decision number 36/PDT.SUS-PKPU/2016/PN.Niaga.Jkt.Pst, and was from such date binding and effective as between the PT Bumi Resources and its creditors. As of June 8, 2017, PT Bumi Resources Tbk had defaulted on the terms of its CDB loan and hence it was offered to CDB to exchange its total outstanding amount under the loan, $600,611,528.30 (including both principal amount and interest accrued until April 25, 2016) for: (a) $193,622,382 in New Senior Secured Debt (corresponding to 32.23754% of the CDB Loan); (b) $406,989,147; and (c) $16,135,192 CVRs (corresponding to 8.33333% of the New Senior Secured Debt allocated to CDB in this CDB Exchange).
Staff comments
1. PT Bumi Resources Tbk or Bumi Resources is one of the largest mining companies in Indonesia structured as a holding company. In the 2012 Forbes Global 2000, Bumi Resources was ranked as the 1898th-largest public company in the world. It is reportedly the biggest thermal coal producer in Indonesia and is majority owned by the Bakrie Group. 2. In 2017, Bumi Resources restructured its debt, including loans from CIC and China Development Bank (CDB); the loans were exchanged for equity and mandatory convertible bonds. It is unclear if the 2012 CDB loan was specifically included, or if this refers to another CDB loan. This issue merits further investigation.