The deal was reached after Bakrie’s talks with commodities giant Glencore hit the buffers. Renaissance Capital, led by Indonesian investor Samin Tan, is expected to provide financing to reduce the debt by $1bn in exchange for an equity stake in Bakrie’s London-listed coal mining joint venture, Bumi, according to sources.
The deal is part of Bakrie’s attempts to refinance the loan it obtained in March this year through Credit Suisse.
The London-listing of Bumi, a joint venture between the Bakries and billionaire financier Nathaniel Rothschild, has been hit by a sharp decline since June, when falling equity markets triggered the mandatory repayment of the one-year $1.345bn loan that had been due to mature in March 2012.
Glencore had been the favourite to seal a deal, ahead of rival Vitol.