PT Bumi cancels sale of coal mines

PT Bumi cancels sale of coal mines

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.


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