| PT Bukit Makmur Mandiri Utama (Buma) high yield debt issue and loan facility PT Delta Dunia Makmur Tbk (Delta) equity placement | Combined total of US$983m | |
|---|---|---|
| Synopsis Two deals involving a US$315m offering of guaranteed senior secured notes issued by finance subsidiary of Buma and US$285m bank facility provided to Buma and a 38% equity placement of Delta. These transactions came soon after the acquisition of Buma by Delta and the acquisition of a 40% stake in Delta by Northstar Pacific Partners | ||
| Firm | Client | Role |
| K & L Gates | [Issuer] Delta | International counsel |
| K & L Gates | [Issuer] Buma | International counsel |
| Susanto & Partners | [Issuer] Buma | Indonesian counsel |
| Clifford Chance | Joint global coordinators, book runners, joint book runners and lead managers, arrangers* | International counsel |
| ABNR | Joint global coordinators, book runners, joint book runners and lead managers, arrangers* | Indonesian counsel |
| Milbank Tweed Hadley McCloy | [Purchaser] Northstar Pacific Partners | International counsel |
| Melli Darsa & Co | [Purchaser] Northstar Pacific Partners | Indonesian counsel |
| O'Melveny & Myers | [Sellers - Buma] PT Bukitmakmur Widya and Mr. Johan Lensa | International counsel |
Law firms from around the globe have pieced together the acquisitions and financings that has launched Indonesian listed company, Delta, into the coal mining industry through its purchase of Indonesian coal mining contractor, Buma. Funding for the acquisition was raised through a high yield and loan financing package for Buma.
“Liquidity for M&A in the debt markets has been limited over the last 12 months, but this transaction shows what can be achieved when the parties are willing to tap the loan and bond market simultaneously in order to raise sufficient funding,” said Andrew Brereton, partner at Clifford Chance.
The combination of a senior loan and senior high yield bond, each sharing a common security package, was unusual and lawyers on the deal had to overcome some challenging intercreditor issues in order to bring the transaction to a close. “The offering of the guaranteed senior secured notes sharing security with a senior loan represents a relatively new development in the high yield market in Asia,” said Alex Lloyd, partner at Clifford Chance. “We believe that the success of this transaction reflects continued interest in the high yield product in general and in Indonesian credits in particular.”
The successful equity placement of Delta was the last stage of the complex transaction. It gives Delta and its shareholders access to one of Indonesia’s most important natural resource companies, said Lloyd.
Indonesia-related transactions continue to be a source of work for law firms in the region. “Clients across sectors are showing great interest in the Indonesian market, particularly those working in the oil, gas and natural resources sector… We expect that the focus on Indonesia will continue, especially from Asian acquirers, strongly supported by international and regional lenders. With fair valuations, a growing economy and a strong natural resources sector, Indonesia has many factors in its favour,” said Lloyd.
*[Joint global coordinators] CLSA and Macquarie
[Book runners] PT Danareksa Sekuritas and PT Bahana Securities
[Joint book runners and lead managers] Barclays Capital, Deutsche Bank and ING
[Arrangers] Barclays Capital, The Bank of Tokyo-Mitsubishi UFJ, Deutsche Bank, Singapore Branch, ING Bank NV, Macquarie Bank, Sumitomo Mitsui Banking Corporation
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