Billionaire Anthoni Salim To Inject $1.6 Billion To Coal Miner Bumi Resources Through Private Placement

Shareholders of Indonesian coal miner Bumi Resources approved a plan on Tuesday to raise up to $1.6 billion by issuing new shares in a private placement. Billionaire Anthoni Salim’s companies will acquire the majority of the new shares and jointly control Bumi with current controlling shareholder Aburizal Bakrie.

Bumi Resources will issue up to 200 billion new shares, 85% of which will be acquired by Mach Energy, which is jointly controlled by the Bakrie Group and Salim. The remaining 15% will go to Salim’s Treasure Global Investments.

Dileep Srivastava, a director at Bumi Resources, said the plan was almost unanimously approved. He also said the funds will be used by the company to repay its longstanding debt.

Prior to the approval of the share sale, Samuel Sekuritas Indonesi’s analyst Jonathan Guyadi said in a report that the funds will translate to a potential savings of about $130 million in interest expense per year, which will increase Bumi’s earnings per share by around 15% and turn it into a net cash company by 2023.

Bumi, which is Indonesia’s largest coal producer, underwent a debt restructuring process in that left it with outstanding debts estimated at roughly $1.5 billion currently.

Salim and his family were ranked No. 3 on the list of Indonesia’s 50 Richest with a net worth of $8.5 billion when it was released last December. The Salim Group has interests in food, retail, banking, telecom, and energy. It’s best known for owning Indofood, one of the world’s largest producers of instant noodles.

Bakrie was once ranked among Indonesia’s wealthiest people but dropped off the list in 2012. The Bakrie family are founders of a palm oil-to-property-empire that was established in 1942.