Bumi Resources Mineral to hold private placement to pay debt

Publicly listed mineral miner PT Bumi Resources Mineral (BRMS) plans to issue US$52 million worth of new shares in a private placement this year to finish paying off a three-year-old debt penalty.

The indebted miner is slated to sell all the shares to Singapore-based management consulting firm Wexler Capital Pte, to which BRMS owes the money. The miner plans to request shareholder approval over the debt-for-equity swap during a meeting on June 24.

“After completing this transaction, BRMS’s minority shareholder ownership will only be diluted by 2.3 percent,” BRMS director Herwin W. Hidayat said in a statement on Tuesday.

The sale is expected to improve the miner’s debt-to-equity ratio and liquidity, he added.

Publicly-listed BRMS owes Wexler $154.96 million worth of shares after the consultancy and other creditors won a court case at the South Jakarta District Court in 2017.

The miner paid off 65 percent of its debt to Wexler in 2017 and was scheduled to pay off the remaining 35 percent in 2018 but delayed payments twice until this year, according to a BRMS investor notice about the swap uploaded on the Indonesian Stock Exchange (IDX) website on May 18.

As of December 2019, Wexler holds a 9.79 percent ownership of BRMS. The miner booked a $1.28 million net profit in 2019, turning around a $103.5 million net loss from the previous year.