Adaro Energy, the country’s second-largest coal miner, may seek bank loans to help it repay its mounting debt this year, one of the company’s directors said. The miner will use also its own funds to settle maturing debt, chief financial officer David Tendian said.
“If our internal cash is not enough [to pay off the debts], then maybe we will try to get loans for that,” David said during investor’s day in Jakarta on Thursday.
According to him, Adaro’s debt stood at $2 billion, while its internal cash amounted to $828 million at the end of first quarter of this year.
“We are planning to reduce our debt this year,” David said.
He did not provide any detail regarding the proportion of bank loans the company would be seeking this year and declined to disclose the name of the lenders.
Adaro is also in discussions with the Ministry of Energy and Mineral Resources about the company’s 56-million ton coal production target for this year, David added.
“We are waiting for the approval of the ministry for our production target. We believe we can reach that production target with our current production capacity,” he said.
Adaro produced 13.99 million tons of coal in the first quarter, a 23 percent increase compared to the same period last year, due to a combination of strong performance, despite poor weather, according to David.
The miner will also adjust the average selling price of its coal with that of the global selling price.
The coal price fetches between $73 to $75 per ton, David said, adding that the company hopes the price would increase soon.
David said the company was working to find the best solution for its planned power plant in Batang, Central Java. “The problem is still, like with other infrastructure developments in Indonesia, about land procurement,” David said. Bhimasena Power Indonesia, a consortium between Adaro Power, J-Power and Itochu, has been awarded to build a power plant in Batang. According to the plans, the power plant requires $4 billion in investment, with around $2.7 billion coming from loans.
Adaro is controlled by five businessmen — Edwin Soeryadjaya, Theodore Permadi Rachmat, Garibaldi Thohir, Subianto and Sandiaga S. Uno — who collectively own 64.55 percent of the company’s shares.
Source: Jakarta Globe