Mining services firm Bukit Makmur Mandiri Utama (BUMA), the principal subsidiary of Indonesia Stock Exchange-listed Delta Dunia Makmur, has completed the successful issuance of the BUMA II 2024 Rupiah bonds (BUMA II 2024 bonds) with a total value of Rp1 trillion ($65.7 million).
The bonds were oversubscribed by 1.4 times and were issued in three series: Series A with a nominal value of Rp251 billion at a fixed interest rate of 7.25% per annum, maturing in 370 calendar days; Series B with a nominal value of Rp332.71 billion at a fixed interest rate of 9.25% per annum, maturing in three years; Series C with a nominal value of Rp416.26 billion at a fixed interest rate of 9.75% per annum, maturing in five years.
A "wide range" of Indonesian pension funds, mutual funds, insurance companies, asset managers, and banks invested in the offering, a BUMA spokesperson told FinanceAsia.
Indra Kanoena, president director of BUMA, commented, “The strong market response to BUMA II 2024 bond offering reinforces confidence in BUMA's strategic direction, robust cash flow management, and credit profile. This bonds issuance allows us to further diversify and solidify our financial foundation, driving growth in our business while strengthening our position as a leading mining service provider and advancing toward becoming a diversified global mining company.”
The proceeds will be used to manage its debt maturity profile and fuel future growth. BUMA has operations in Indonesia and Australia, and in June this year it bought the Atlantic Carbon Group in Pennsylvania for around $122 million, and subsequently BUMA became the leading producer of anthracite coal in the US.
42.29% of the proceeds, amounting to Rp422.9 billion, is being allocated to repay debt under BUMA I 2023 Series A, which matures on January 8, 2025. Additionally, 28.86% of the funds will be used for capital expenditure to purchase heavy equipment, enhancing BUMA's production capacity and operational efficiency, the media release said.
The remaining 28.85% will support BUMA's ongoing operational activities, enhancing the company’s ability to manage cash flows and control costs effectively.
The issuance has further diversified the company’s financing strategy, which consists of both USD and IDR bonds, conventional and Shariah bank loans, and leasing financing schemes. The strategy strengthens the company’s financial resilience, enhances its ability to navigate market volatility, broadens its financial base, placing the company in a better position for future growth, according to the media release.
The BUMA II 2024 bonds received an A+ rating from Pemeringkat Efek Indonesia (Pefindo) and Fitch Ratings. BNI Sekuritas and Trimegah Sekuritas Indonesia were the joint lead underwriters for the bonds’ issuance.
Delta Dunia Group also owns two new subsidiaries: Bukit Teknologi Digital (BTech), offering mining technology solutions, and BISA Ruang Nuswantara (BIRU), a social entity dedicated to education, vocational schools, and fostering a circular economy. In July 2024, the group established Katalis Investama Mandiri to support its long-term strategy in environmental, social and governance (ESG).
