Glencore nears refinancing deal with Bakries

LONDON-LISTED commodities trader Glencore is nearing a deal to lend up to $900m (£570m) to Indonesia’s Bakrie Group to help it refinance debt of $1.35bn in exchange for additional marketing rights on coal.

Under the refinancing deal, Glencore will have the option of turning the loan into an equity stake in the coal miner Bumi, which at current prices has a market capitalisation of $2bn, if Bakrie cannot repay the debt, it emerged yesterday.

The Indonesian group, controlled by Aburizal Bakrie, who heads the Golkar political party, owns a 47 per cent stake in Bumi, formed last year as a joint-venture with financier Nat Rothschild’s vehicle Vallar.

The Bakries have held re-financing talks on the debt after mandatory repayment of the loan – a one-year deal arranged by Credit Suisse in March to consolidate Bakrie family debts – was triggered by a sharp drop in Bumi’s London shares that took the price below 850p last month.

It is understood the Bakrie group have also held talks with Swiss-based Vitol, the world’s largest oil trading firm and private-equity firm TPG-backed Northstar.

Bumi rose 4.22 per cent to 766p yesterday.