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Friday, 08 June 12
NO IMMEDIATE IMPACT ON ADARO'S RATING FROM BEP TRANSACTION - FITCH RATINGS
 Fitch Ratings has said that PT Adaro Indonesia's (Adaro, 'BB+'/ Stable) ratings are not immediately affected by its parent PT Adaro Energy Tbk's (Adaro Energy) planned investment in greenfield coal miner PT Bhakti Energi Persada (BEP).
Adaro Energy recently signed an agreement for the right to acquire up to 51% of BEP over three years for up to USD500m through a convertible loan or to issue a pre-specified number of shares of Adaro Energy to the shareholders of BEP (participating in this agreement) in exchange for 79.8% of BEP. Adaro Energy currently owns 10.22% of BEP.
BEP has seven coal concessions, all IUPs (Izin Usaha Pertambangans - mining business licences), with estimated Australasian Joint Ore Reserves Committee (JORC)-compliant coal resources of 9.53 billion tonnes. Fitch expects that a large part of the investment required before bringing these resources to production will relate to the coal hauling road connecting the mines to barging and shipping points. Coal resources of BEP are of low energy content (3,379kcal on a gross as received basis) and as such will trade at a substantial discount to benchmark thermal coal prices. However, the favourable geology of BEP mines will allow the extraction of coal at an extremely low strip ratio (i.e., units of overburden to be removed on per unit of coal extracted) over the average life of a mine of below 0.5x as estimated by Adaro Energy, supporting the economic viability of these operations. The materially shorter supply chain of BEP's mines at 130km (versus 320km for Adaro's existing mines) would provide further support.
However, BEP coal mines have substantially lower cash margins than Adaro Energy's currently main cash generating mine, Tutupan, and are more susceptible to low coal prices. There is also uncertainty relating to coal mining regulations in Indonesia at present, such as restrictions on coal exports and a resource export tax. Any unfavourable regulatory developments can affect the commerciality of BEP's operations. However, Adaro Energy's options to invest in rather than an outright purchase of BEP resources provide a meaningful level of flexibility and safety. Fitch believes that any investments in the first half of the three-year option period will not be significant and can be funded from Adaro Energy's projected internal cash generation.
If successfully executed, BEP can over time contribute to the increasing diversity of Adaro Energy's mining operations. The limited diversity of Adaro Energy's existing mine sites is one of the factors currently constraining its ratings.
The ratings of Adaro are based on the credit profile of Adaro Energy given their strong rating linkages as per Fitch's parent-subsidiary linkage methodology. At end-March 2012 Adaro Energy's funds from operations (FFO)-adjusted gross leverage was 2.4x and FFO interest coverage 7.0x.
Negative rating action may result from FFO gross leverage rising above 2.75x or FFO interest coverage falling below 5x for two consecutive years. Other negative rating guidelines are material deviation from its policy of maintaining strong liquidity; adverse regulatory developments that will significantly impair Adaro Energy's financial profile; further substantial investments that weaken Adaro's financial or operating risk profile and a sustained weakening of coal prices.
Source: Fitch (Hong Kong) Limited
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Tuesday, 13 December 22
AUSTRALIA TO CAP PRICES OF COAL, GAS TO DRIVE DOWN ENERGY BILLS - REUTERS
Australia will cap coal and gas prices for a year in a bid to shave utility bills for households and businesses hit by soaring costs because of the ...
Tuesday, 13 December 22
YANCOAL AUSTRALIA TO PREPAY $459 MLN DEBT AS RECORD COAL PRICES BOOST CASHFLOWS - REUTERS
Coal miner Yancoal Australia Ltd. said on Friday it intended to prepay $459 million of its debt on or around Dec. 16, as elevated coal prices were ...
Tuesday, 13 December 22
WHY COAL LEADS THE RISE IN COMMODITIES THIS YEAR - MARKETWATCH
This year marked a resurgence for coal, often known — and loathed — by environmentalists as the dirtiest energy source, with prices mor ...
Thursday, 08 December 22
BIMCO TO REVISE WAR RISK CLAUSES
Work to revise the BIMCO War Cancellation Clause 2004, the BIMCO War Risks Clause for Time Chartering 2013 (CONWARTIME 2013) and the BIMCO War Risk ...
Thursday, 08 December 22
COAL ROYALTY PAYMENTS BOOST AUSTRALIAN STATE'S BUDGET FORECAST - REUTERS
Australia’s Queensland state on Wednesday forecast a record surplus for the current financial year, largely driven by higher royalty payments ...
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- Indo Tambangraya Megah - Indonesia
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- Global Business Power Corporation, Philippines
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- MS Steel International - UAE
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
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- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Sakthi Sugars Limited - India
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- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
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- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
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- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
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- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Australian Coal Association
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- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
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- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- The University of Queensland
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
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