PT Bukit Makmur Mandiri Utama (BUMA), the principal subsidiary of PT Delta Dunia Makmur, has secured the issuance of the BUMA II 2024 Rupiah Bonds (BUMA II 2024 Bonds) with a total value of Rp1 trillion (US$65.4 million).
The bonds were oversubscribed by 1.4 times within days, indicating strong investor demand and confidence in BUMA’s financial stability and growth prospects. With more investors committed to longer-term tenors, BUMA has enhanced its ability to effectively manage its debt maturity profile.
Established in 1990, PT Delta Dunia Makmur (Delta Dunia Group) is a holding company operating in Indonesia, Australia, and USA.
The BUMA II 2024 Bonds were issued in three series, namely Series A with a nominal value of Rp251,035,000,000 at a fixed interest rate of 7.25 percent per annum, maturing in 370 calendar days; Series B with a nominal value of Rp332,710,000,000 at a fixed interest rate of 9.25 percent per annum, maturing in 3 years’ and Series C with a nominal value of Rp416,255,000,000 at a fixed interest rate of 9.75 percent per annum, maturing in 5 years.
The BUMA II 2024 Bonds Offering, featuring a competitive blended cost, has attracted a wide range of reputable pension funds, mutual funds, insurance companies, asset managers, and banks. With a greater proportion of investors committing to longer-term tenors, including an anchor investor committing to the five-year tenor, BUMA is well-positioned to align its financing strategy with its equipment lifespan.
Indra Kanoena, President Director of BUMA, said 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.” Indra said in a statement on Tuesday, October 1, 2024.
Debt maturity profile and future growth
About 42.29 percent of the proceeds, amounting to Rp422,910,000,000 is allocated to repay obligations of BUMA I 2023 Series A, maturing on January 8, 2025. This allocation underpins BUMA’s commitment to aligning its debt maturity schedule and ensures effective and sustainable debt management.
Additionally, 28.86 percent of the funds will be used for capital expenditures to purchase heavy equipment, enhancing BUMA’s production capacity and operational efficiency. The remaining 28.85 percent will support BUMA’s ongoing operational activities, enhancing the company’s ability to manage cash flows and control costs effectively.
The issuance of BUMA II 2024 Bonds has further diversified the company’s financing strategy, which consists of both US dollar and Rupiah bonds, conventional and sharia bank loans, and leasing financing schemes. 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.
“The strong support from our investors gives us the confidence to pursue greater opportunities for sustainable growth. With a diversified financing base, we are well-positioned to stay on course with our strategic transformation” Indra concluded.
The BUMA II 2024 Bonds received an A+ rating from PT Pemeringkat Efek Indonesia (Pefindo) and Fitch Ratings. PT BNI Sekuritas and PT Trimegah Sekuritas Indonesia were the Joint Lead Underwriters for the bonds issuance.
