JAKARTA: PT Borneo Lumbung Energi & Metal Tbk, seeking a US$1 billion loan, may eventually repay some of the debt with proceeds from a bond sale.
Bloomberg reported the Indonesian coking coal maker hired Standard Chartered Plc to arrange and underwrite the 5-year loan, which is currently being marketed.
Repaying the loan with proceeds from a bond sale has been discussed with banks invited to join the loan, five people familiar to that matter said, declining to be identified as the details are private.
Any future sale of notes is being presented as an incentive for banks to join the loan as lenders to the facility may be given a role in the bond sale later on, four of the people said.
Standard Chartered is inviting banks to join at three levels in the first phase of syndication.
At the top level, banks underwriting US$250 million with a so-called take and hold of US$150 million, and banks underwriting US$200 million with the same take and hold, will receive the title of mandated lead arranger and bookrunner, a person with direct knowledge of the deal said.
The take and hold is the amount of a loan that banks intend to retain on their balance sheet rather than selling to other banks.
Further, Bloomberg reported a number of lenders are considering committing US$25 million to US$50 million, without underwriting, four people familiar with the matter said on Dec. 20.
While no firm commitments have been received, several banks are processing credit approvals and plan to lend at least US$150 million, another person familiar with the matter said yesterday.
Standard Chartered Plc is delaying financial close and funding of the loan until next year as Borneo Lumbung waits on certain approvals from Indonesia’s capital markets regulator.
Borneo Lumbung is buying a stake in coal producer Bumi Plc from PT Bakrie & Brothers for US$1 billion cash and said in November it will use the US$1 billion loan from Standard Chartered to fund the acquisition.
Bakrie Group and Borneo sealed sales and purchase agreement in October where Borneo agreed to acquire 23.8% of Bumi Plc shares. Bakrie Group may pocket US$1 billion that will be used to settle debt to Credit Suisse. Bakrie & Brothers owes Credit Suisse US$1.3 billion.
To acquire the share at US$1 billion, Borneo is seeking loans from Standard Chartered that will due in 5 years by pledging 99% of its units shares PT Amin Koalindo Tuhup and PT Borneo Mining Services. (ags)