Bumi close to refinancing CIC debt deal

Kasmira Jefford
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BUMI, the Indonesian coal mining firm created by Nat Rothschild, is understood to be close to finalising a deal to refinance the first part of the $1.9bn debt owed by one of its subsidiaries to the Chinese sovereign wealth fund.

It was reported yesterday that the FTSE 100 firm, which owns a 29.2 per cent stake in thermal coal producer PT Bumi, may be considering approaching the CIC about reducing some it its subsidiary’s debt in return for control of a series of exploration assets.

Sources close to the situation, however, have refuted this, saying that it is more likely that the loan will be swapped for cheaper facilities that will allow the company to repay its debt two years earlier than scheduled.

The deal, which is still being negotiated, would cut the interest charge on the first tranche from the current 19 per cent to around 10 per cent a year.

Rothschild came under fire last week after Bumi abandoned its proposed $2bn (£1.73bn) acquisition of another subsidiary, Bumi Resources Minerals , which was aimed to simplify the group’s complex structure.

The announcement came just weeks after the group’s majority shareholder, the Indonesia Bakrie family, said it had received a margin call on a $1.34bn loan against Bumi’s assets.