Buma launches 1 trillion rupiah bond offering

PT Bukit Makmur Mandiri Utama (Buma), the principal subsidiary of Delta Dunia Group, has issued its second rupiah-denominated bond offering amounting to 1 trillion rupiah (US$65.41 million).

The Buma II 2024 bond offering includes three series: Series A with a duration of 370 calendar days, Series B with a duration of three years, and Series C with a duration of five years, starting from the issuance date.

Established in 1998, Buma is Indonesia’s second largest coal mining services contractor by production volume, providing mining services to some of the largest coal producers in the country.

Buma has appointed PT BNI Sekuritas and PT Trimegah Sekuritas Indonesia as the joint lead underwriters of the issuance. The initial offering period started on September 18 and will end on September 24.

Buma II, which follows its first rupiah bond issuance last year, further diversifies the company’s financing strategy, which consists of both US dollar and Indonesian rupiah bonds, conventional and Shariah bank loans, and leasing financing schemes. According to Buma, the strategy strengthens the company’s financial resilience, enhances its ability to navigate market volatility, and broadens its financial base, placing the company in a better position for future growth.

Proceeds from the latest offering will be allocated to repay obligations of BUMA I 2023 Series A maturing on January 8 2025. The amount is 422.91 billion rupiah or 42.29%.

Furthermore, 28.86% will be used for capital expenditure to purchase heavy equipment. The remaining amount will be allocated to support Buma's operational activities in Indonesia and Australia.

BUMA has obtained an A+ rating from PT Pemeringkat Efek Indonesia (Pefindo) and Fitch Ratings. The company says the rating reflects its excellent credit quality and confirms its ability to fulfil its debt obligations with very low risk.

“As one of the leading mining services companies, we need to stay vigilant in facing unforeseen challenges and capitalizing on opportunities in the future to be able to continue providing comprehensive services to some of the largest and longest-running mines in Indonesia. With more diverse funding sources, we will have greater opportunities to accelerate further growth in the industry,” says Buma president director Indra Kanoena.

Source: Theasset.com