DEPOK (eNBe Indonesia) - MNC Energy Investments (IATA), owned by businessman-cum-politician Hary Tanoesoedibjo, will issue shelf bonds with a maximum principal amount of Rp500 billion, as part of Rp1 trillion shelf bonds offering.
IATA will also issue shelf sukuk wakalah with a maximum investment capital of Rp250 billion, as part of Rp500 billion sukuk offering plan. The issue of the bonds ahead of next year’s elections might alert some, but let’s see.
The funds will be used as the Company’s working capital for coal trading, loan facility payments, and providing loans to PT Bhakti Coal Resources (BCR) to accelerate the development of its subsidiaries’ business in the coal mining sector.
The bookbuilding started in September 7 until September 20, 2023 and the offering is set at September 29 to October 3, 2023.
IATA noted that despite facing several challenges such as rising fuel prices, royalty rates, and other operational costs, it is optimistic that the coal business still has the potential for positive growth in the second half (H2) of 2023.
The International Energy Agency (IEA) predicts global coal demand will reach 8,388 million tons, increasing by 0.4% in 2023. Exports account for 65.0% of IATA’s total coal sales in 2023.
The Government, through the Ministry of Energy and Mineral Resources (ESDM), has set Indonesia’s coal production target for 2023 at 694.5 million tons, higher than 2022’s production target of 663 million tons.
Of this target, 176.8 million tons are intended for domestic consumption, while the remaining 517.7 million tons are targeted for export.
Based on the report from the Indonesian Joint Committee for Mineral Reserves (KCMI), currently, IATA has coal reserves of 386.6 million MT.
That total is generated from only around 20% of the Company’s mining area of 72,478 Ha. IATA believes that coal reserves will keep increasing as the exploration process shows additional proven reserves, at least as much as 600 million MT for all IUPs.***