JAKARTA. PT Bumi Resources Tbk (BUMI) noticed an elevated risk of refinancing following insufficient dividends received from its subsidiaries. It might end up with BUMI not being able to cover its debts. This condition drove the S&P rating agency to lower BUMI’s rating to CCC and give this coal mining company a negative outlook.
In its official announcement on Tuesday (5/10), S&P explained that the dividends obtained by BUMI from its subsidiaries were not enough to cut its debts significantly. S&P revealed that Kaltim Prima Coal (KPC), as the most generous contributor, only paid out dividends of USD 42 million in H1 2021 despite its EBITDA of USD 254 million. Moreover, Arutmin Indonesia did not even channel out dividends, although its cash reached USD 93 million and EBITDA of USD 68 million.
BUMI is, in fact, facing a stagnancy in financing, further convincing S&P that BUMI would meet difficulties in paying tranche A and B debts when due in December 2022. These debts accumulated to USD 1.2 billion. (AM/ZH)