CIC Bets Big on Resources
BY RICK CAREW AND TOM WRIGHT
HONG KONG -- China's sovereign-wealth fund is fast becoming a major
backer of natural-resources companies world-wide, as the $300 billion
fund seeks to buy into a global rebound.
China Investment Corp.
on Wednesday ramped up its position in the commodities area for the
second time in two days with a $1.9 billion debt-like investment in PT
Bumi Resources of Indonesia, the country's largest producer of thermal
coal, or coal used to generate electricity.
The day before, CIC agreed to buy a 15% stake in Hong Kong-based commodities
trader Noble Group Ltd. for $850 million.
Together with a $1.5 billion investment ...
http://online.wsj.com/article/SB125373234125034921.html
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0oqpWxbMcQ4
CIC ‘Finding Its Feet’ With Bumi, Noble Purchases (Update1)
By Bloomberg News
Sept. 24 (Bloomberg) -- China’s $297.5 billion sovereign
wealth fund is stepping up investments in commodities companies,
agreeing to spend $2.75 billion in the last two days.
China Investment Corp. bought $1.9 billion of debt from PT
Bumi Resources, Indonesia’s biggest coal producer, Jakarta-based
Bumi said in a statement late yesterday. A day earlier, CIC paid
$850 million for a 15 percent stake in Noble Group Ltd., a Hong
Kong-based commodity supplier.
After losing money on Blackstone Group LP and Morgan
Stanley, CIC is increasing investments in resources firms to
gain access to the raw materials it needs to fuel growth.
China -- the world’s biggest buyer of commodities including
soybeans, cotton and iron ore -- will expand 8.2 percent this
year, compared with a March forecast of 7 percent, the Asian
Development Bank said this week.
“China is relatively resources short, and it’s not a
secret that CIC has this long-term strategy to buy resources
overseas,” said Fraser Howie, author of the book “Privatizing
China,” in a phone interview from Singapore. “It seems it is
finding its feet after the financial investments it made earlier,
which brought it criticism at home.”
Bumi will use part of the funds to pare about $1.6 billion
of debt and boost investments, according to Dileep Srivastava,
the company’s head of investor relations. The transaction with
the Chinese fund may also help Bumi increase investments in China.
Resources Shortage
“At a time when there are a lot of investments on the
anvil, it frees up your cash flow,” Srivastava said by phone
from Hong Kong yesterday. “You will be getting comfortable
tenors at a time when you will be investing heavily in the next
couple of years.”
A CIC spokeswoman in Beijing confirmed the Bumi deal today
and refused to comment further.
The Reuters/Jeffries CRB Index, a gauge of 19 raw materials
and commodities, remains 46 percent below a high reached in July
last year.
“China has prioritized the strategy of overseas commodity
acquisitions as the nation’s resources shortage becomes the
constraint for its economic growth,” said Shi Yan, an analyst
at UOB-Kay Hian Ltd. in Shanghai. “Now is a good time to buy
resources after commodity prices dropped.”
Bumi, Noble
Bumi’s shares have more than tripled this year making it
the best-performing stock in the 19-stock MSCI Indonesia Index.
They rose 0.8 percent to 3,350 rupiah on Sept. 17. Indonesian
markets have been closed to celebrate the Muslim festival of
Eid-ul-Fitr.
Deutsche Bank AG advised CIC, while PT Samuel Sekuritas
helped Bumi, according to the statement. Bumi will pay a coupon
of 12 percent on the debt to CIC, the company said in an e-
mailed statement. It will start paying the debt in the fourth
year and complete the repayment in the sixth year, according to
the statement.
Noble will sell $850 million worth of new and existing
shares to CIC at 8.1 percent less than the last traded price, it
said in a statement on Sept. 22. The sale includes 135 million
shares owned by Chief Executive Officer Richard Elman and 438
million new shares, the Hong Kong-based company said.
Noble, founded in 1987 by Elman, owns mines, farms, ports
and processing facilities, according to its Web site. It trades
commodities from aluminum to zinc and operates in more than 40
countries. It will use the S$926 million ($654 million) proceeds
to expand investment in global agricultural commodities.
Stepping Up
CIC had 87.4 percent of its assets of $297.5 billion in
cash or equivalents last year, it said last month. It will
actively grasp investment opportunities this year after slowing
spending in 2008 because of the global financial crisis, the
company said in a statement on Aug. 7.
The sovereign fund bought a 17 percent stake in Teck
Resources Ltd., Canada’s largest diversified mining company, in
July for C$1.74 billion ($1.5 billion) as the Canadian company
sought to reduce debt.
“They stepped up investment recently, but you never know
when they are going to make the next investment,” Howie said.
“They were pretty quiet for a while and it could be next week
or next month when they make another investment. It’s a big deal
for the company, but for the world, there are a lot of
commodities.”
Singapore’s sovereign wealth fund also is shifting to
commodity investments after the global financial crisis drove
down the value of its stakes in Bank of America Corp. and
Barclays Plc, causing it to report a profit that dropped a
record 66 percent in the 12 months to March 31. Temasek Holdings
Pte agreed to buy 13.76 percent of Singapore-based commodities
supplier Olam International Ltd. in June.
China established its sovereign wealth fund in 2007 to help
manage the nation’s $2 trillion of foreign-exchange reserves.
For Related News and Information:
Company News: CHIVCZ CH <Equity> CN <GO>
Top Stories: TOP <GO>
China Economic Statistics: ECST CH <GO>
To: [email protected]
From: [email protected]
Date: Wed, 23 Sep 2009 23:17:52 -0700
Subject: Re: [ob] bumi
CIC juga perhitungkan jumlah cadangan batubara BUMI yg
mencapai
lebih dari 10 milyar ton bernilai USD 700 milyar.
Orang China pasti hitungannya teliti & mantap baru mau kucurkan uang
USD 1.9 milyar.
Jadi tenang saja apalagi dana tsb akan digunakan BUMI salah satunya
untuk meningkatkan produksi batubara 2 X lipat pd th 2012.
--- On Wed, 9/23/09, [email protected] <[email protected]> wrote:
From: [email protected] <[email protected]>
Subject: Re: [ob] bumi
To: [email protected]
Date: Wednesday, September 23, 2009, 10:21 PM
Complicated banget yah...
Maaf ni lagi liburan. Memangnya warrant yah? Bukan nya utang?
Sent from my BlackBerry®
powered by Sinyal Kuat INDOSAT
From: Peter Alimin <milis...@live. com>
Date: Thu, 24 Sep 2009 09:09:44 +0700To: OB<obrolan-bandar@ yahoogroups.
com>Subject: RE: [ob] bumi
ini ada analisa dari warung sebelah, cmiiw..
Warrant Bumi yang dipegang CIC = U$ 1,9 Milliar X Rp. 10.000,- = Rp.
19.000..000.000. 000,-.
Pada harga Executeable Share BUMI-W Rp. 4.000,- yang dipegang harus ada
underlying share sebanyak = 4.750.000.000 Lembar
atau sebanyak 24% dari Total saham BUMI yang ada sekarang ini= 20.000.000.000
lembar
Kalau BUMI belum punya Treasury Stock sebanyak 4.750.000.000 lembar
pada saat akan dieksekusi oleh CIC dan baru akan menerbitkan saham baru
sebanyak 4.750.000.000 lembar maka pemegang saham BUMI lama saat itu nilainya
bakal TERDILUSI sebesar +/- 25%
Mr. Dillep. apakah BUMI sudah punya saham Treasury sebagai underlying warrant
CIC ??? I DON'T KNOW !!!!
Bunga yang harus dibayar untuk HUTANG ini 19% X Rp. 19.000.000.000. 000,- = Rp.
3.610.000.000. 000,-/tahun dibagi jumlah saham 20.000.000.000 lembar equivalen
Rp. 180,5/ saham
1Q09 BUMI :
Total Asset = US$ 5,5 M
Total Kewajiban = US$ 3,4 M + Hutang dari CIC China = US$ 1,9 M , sekarang jadi
= US$ 5,3 M
Hanya ada sisa nilai sebesar US$ 0,2 M atau US$ 200 Juta dari Asset
BUMI untuk 20 M lembar pemegang saham sekarang ini atau senilai cuma
RP. 100,- /Lembar saham
??
To: obrolan-bandar@ yahoogroups. com
From: milis...@live. com
Date: Wed, 23 Sep 2009 22:14:20 +0700
Subject: [ob] bumi
PT Bumi Resources Tbk (“Bumi”)
announced that China Investment Corporation (“CIC”) has invested US$1.9
billion in Bumi in the form of a debt-like instrument. The US$1.9
billion investment consists of US$600 million repayable in year 4,
US$600 million in year 5, and remaining US$700 million in year 6. The
investment attracts a 12% annual cash coupon with a total IRR of 19%,
the balance payable at the time of final maturities. The funds will be
used for debt restructuring and capital expenditure. “We are
honored by this historic and transformational investment by CIC, the
leading sovereign fund in the world. The investment will enable Bumi
to implement its growth strategies quickly and provide a stable capital
structure. More importantly, the partnership creates the platform for
CIC and Bumi to pursue investment opportunities jointly”, remarked Ari
Hudaya, President Director and CEO of Bumi, one of the leading natural
resources companies in Asia with world-class coal assets. CIC,
wholly-owned by the People’s Republic of China, is one of the largest
and reputable investment institutions in the world. Bumi is
Indonesia's largest producer and one of the world’s largest exporter of
thermal coal with strong practices in community development, corporate
social responsibility and corporate governance. PT Samuel Sekuritas
Indonesia acted as arranger and financial advisor, and Jones Day acted
as legal advisor to Bumi. Deutsche Bank and China International
Capital Corporation (CICC) acted as financial advisors and Davis Polk
& Wardwell acted as legal advisor to CIC in this transaction. - just announced
2 hours ago,,,
CMIIW
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