Indonesia's Bumi averts financial squeeze as $425 mln in loans extended

Reuters

* Two loan facilities extended for three more months -Bumi

* Hedge fund manager Noonday, Credit Suisse among lenders-sources

* Bumi in talks with sovereign fund CIC to convert debt intoequity -sources

By Janeman Latul

JAKARTA, Oct 1 (Reuters) - A unit of Indonesia's biggestminer, PT Bumi Resources, has extended $425 millionworth of maturing loans for three more months, the company said,averting an immediate financial squeeze as it struggles with agrowing pile of debt.

It was another last minute debt extension by the coal mininggroup, controlled by the politically-connected Bakrie family,after Bumi Resources refinanced a maturing $150 million debt inAugust at a high cost.

PT Bumi Resources Minerals, a unit of PT BumiResources, extended two loan facilities -- $100 million and $325million -- from Credit Suisse due this month toDecember 2013, the company said in a statement.

The loans arranged by Credit Suisse involved creditors suchas U.S. hedge fund manager Farallon Capital Management's Noondayunit and the Swiss bank itself, sources with direct knowledge ofthe matter said.

The extension comes after Moody's Investors Servicedowngraded the corporate family and senior secured bond ratingsof PT Bumi Resources in late July to Caa1 from B3.

Bumi faces the financial pressure of a much weakercommodities market, slowing economic conditions in China and ontop of that huge liquidity constraints as a result of debtmaturities, Philipp Lotter, Singapore-based managing director ofcorporate finance at Moody's, told Reuters last month.

The company did not disclose the interest rate on the loans.

But sources said the $100 million loan was originally an18-month facility and had an interest rate of LIBOR plus 6percent, while the $325 million loan was an over 2-year facilitywith an interest rate of LIBOR plus 7 percent. LIBOR is theLondon Interbank Offered Rate.

Bumi Resources took an expensive $1.9-billion loan in 2009from sovereign wealth fund China Investment Corp andhas been trying since then to swap the debt into equity at oneof its units.

"They are discussing a debt-to-equity swap with CIC," saidone source, adding that the extension was agreed because lenderswere comfortable with the collateral backing the loans.

Bumi Resources Minerals is the group's metals unit.

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