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Adaro Indonesia prepays its US$800 mln senior notes

JAKARTA (Rambu Energy) – PT Adaro Energy Tbk (ADRO.IJ), a coal and energy company, said Thursday (Oct 23) that its indirectly wholly-owned subsidiary, PT Adaro Indonesia, has exercised its call option for full redemption of its US$800 million guaranteed senior noes issued on Oct 22, 2009.

The company said in a statement, signed by Cameron Tough, Adaro Energy’s corporate secretary and investor relations division head, that the repayment of the Notes was funded by a portion of Adaro Indonesia’s US$1 billion loan facility and internal cash.

The use of loan facility was based on the loan Facility Agreement dated August 25, 2014.

The amortizing term loan facility has a lower cost of funds than the Notes.

By repaying the Notes with the combination of the loan facility and internal cash, Adaro will further extend its debt maturity profile, lower its cost of funds, and maintain its strong capital structure.

This will save Adaro up to US$40 million per year in interest expense, the company said.

“The refinancing activity is in line with our strategy to maintain strong balance sheet and flexible liquidity. In this challenging coal price environment, we will focus on capital preservation, cost efficiency, and deleveraging,” Adaro’s Director and Chief Financial Officer, David Tendian, said.

“We remain on track to achieve the guidance for this year as well as deliver on our long term strategies,” he added.

Adaro Indonesia is the coal mine operating company of PT Adaro Energy. In the first half of 2014, Adaro produced 27.8 million tons of coal, 12 percent higher than in the same period last year. The company is on its way to produce a target of 54-56 million tons of coal this year.

In 2013, Adaro Indonesia produced 52.3 million tons of coal from a single Coal Cooperation Agreement (CCA) area in South Kalimantan.

Its overburden removal stood at 149.5 million bank cubic meters in the first half of this year, 5 percent higher year-on-year.

Its earnings before interest, tax, depreciation and amortization (EBITDA) increased by 31 percent to US$513 million in the first half. It targets an EBITDA of between US$750 million to US$1 billion this year. (*)

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