PT Bumi cancels sale of coal minesadmin
Monday, August 28th 2006
Indonesian mining company PT Bumi Tbk has cancelled the sale of two coal mines to a local investment bank and will instead look for another buyer.
Bumi – Indonesia`s largest listed mining group – agreed in March to sell PT Arutmin Indonesia and PT Kaltim Prima Coal to PT Borneo Lumbung Energi, an affiliate of Renaissance Capital for US$3.2 billion.
However, a half-yearly report by Bumi detailed a rise in production costs at the two sites, which in turn prompted Renaissance to ask for a lower acquisition price, upon which the two parties could not agree, said Bloomberg.
Renaissance had planned to finance the deal by borrowing US$2.1 billion from foreign banks, with the remainder coming from equity, including US$700 million in an exchangeable bond.