Working Capital Minus 2 Billion US Dollars, Bumi Resources Owned By The Bakrie Conglomerate Family Converts IDR 1.01 Trillion Of Debt Into BUMI Shares

Illustration. (Photo: Unsplash)

JAKARTA - The mining company belonging to the Bakrie conglomerate family, PT Bumi Resources Tbk (BUMI) has successfully obtained approval from Innovate Capital Pte. Ltd to convert its debt into shares. To that end, Bumi Resources will hold an action to increase capital without pre-emptive rights (PMTHMETD).

Citing a document published by Bumi Resources, Wednesday, June 22, the company has a debt to Innovate of IDR 1.01 trillion. However, in the current condition with a negative working capital of US$2 billion, the company and Innovate have agreed to settle their debt obligations through conversion into shares.

Under this agreement, Bumi Resources will issue 13.21 billion new series C shares with a nominal value of Rp50 per share or 10.25 percent of the issued and paid-up capital. The conversion of debt into shares is carried out at a conversion price of Rp. 76.59 per share.

"Based on the debt settlement agreement on June 20, 2022," reads the document published by Bumi Resources.

But the plan will require the approval of other shareholders. To that end, the company will hold an extraordinary general meeting of shareholders (EGMS) on 29 July.

As additional information, in general, the results of the PMTHMETD implementation in the context of converting debt into shares are expected to improve the financial position, strengthen the capital structure, and improve the debt to equity ratio of the company.