JAKARTA. Moody's Investors Services warned for a decline in the credit quality of PT Bukit Makmur Mandiri Utama (BUMA), Indonesia's second largest coal mining company, due to the weak coal prices.
Maisam Hasnain, Moody's Assistant Vice President Analyst, acknowledged that BUMA does have sufficient liquidity until 2021. The subsidiary of PT Delta Dunia Makmur Tbk (DOID) has also increased its cash position to US$ 150 million at the end of the first semester of 2020.
However, on the other hand, BUMA must face the risk of debt restructuring, because in 2022, the company's US$ 350 million bonds will mature. "We estimate that BUMA's credit quality will deteriorate if it fails to formulate a definite debt restructuring plan in the coming months," said Hasnain.
Moody's estimates that BUMA needs to issue more bonds of up to US$ 750 million. However, it will be quite difficult because the trend of issuing high yield bonds in Indonesia is still weak. BUMA's shareholders only agree to issue new bonds with a maximum coupon of 10%, lower than the yield of the maturing bonds of 17%. (KR/AR)