BUMI Should Sell Assets to Pay Debts: Analysts

TEMPO.CO, Jakarta - PT Bumi Resources Tbk (IDX: BUMI) is likely sell its assets again to source necessary funding to pay off debts. Analyst from Investa Saran Mandiri, Kiswoyo Adi Joe, said the Bakrie Group subsidiary could only settle its debts by selling assets or by obtaining new loans.

According to Kiswoyo, there is little chance for BUMI to seek funding through a rights issue. The last rights issue BUMI held proved unabsorbed by the market, because the public had long lost their confidence in the company's performances.

Last Thursday, Bumi Resources' management made another announcement about their inability to pay off bond interests. The bond issuer, BUMI's subsidiary Bumi Investment Pte Ltd. Singapore, said that the bond interest payment—initially scheduled for October 2014, was postponed until the end of November.

Bumi Resources also has a debt of US$275 million to the five foreign banks: Axis Bank Limited, Credit Suisse, Deutsche Bank, UBS AG, and CDB. The biggest loan is to Axis Bank Limited, which is US$200 million.

"Bumi is undergoing a tough situation. Then there is the negative sentiment from domestic politics, related to the fact that its group owner is the chairman of one of Indonesia's major political parties," said Satrio Utomo, an analyst of PT Universal Broker Indonesia.

"The only way for Bumi Resources to survive is by selling assets to pay its debts," Satrio said. 

FAIZ NASHRILLAH | DINI PRAMITA