Singapore imposes moratorium on Berau bonds due today

[BERAU] The Singapore High Court has imposed a moratorium on bonds of Berau Capital, a subsidiary of Indonesian miner Berau Coal, giving the issuer until Jan 4 to negotiate with bondholders.

The 12.5 per cent bonds of US$450 million come due on Wednesday. The bond is expected to be restructured, along with a US$500 million issue due 2017.

During takeover talks, Sinarmas-backed Asia Coal Energy Ventures (ACE) had argued that any restructuring would require the company to file for a Penundaan Kewajiban Pembayaran Utang (PKPU) under Indonesian law, in addition to obtaining a stay under Singapore law. A PKPU suspends a debtor's payment obligations while it discusses restructuring with creditors.

On July 1, ACE won control of Asia Resource Minerals , the parent of Berau Coal. ACE said it planned to restructure Berau's bonds on terms similar to those ARMS had proposed previously.

ARMS had offered to exchange the 2015s for new notes maturing in July 2019 and the 2017s for new notes due December 2020. The new notes were to pay monthly coupons of 6.75 per cent for the first 18 months, of which 3.0 per cent would be in cash and 3.75 per cent payment in kind; 7.5 per cent for months 19-30, comprising 3.5 per cent in cash and 4.0 per cent PIK; 8.0 per cent for months 31-42, comprising 4.5 per cent in cash and 3.5 per cent PIK; 8.25 percent paid entirely in cash for months 43-54; and 9.0 per cent paid in cash thereafter.

IFR