176 Adaro Energy Annual Report 2009
From Us to Y
ou
Running Adaro
Management Report
Owning Adaro
Governing Adaro
Financial Report
Contact Us Corporate Social
Responsibility Adaro in Summary
www.adaro.com
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 538
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
21. LONG-TERM BANK LOANS continued b.
Senior Credit Facility syndicated loan
On 13 August 2008, SIS the “Borrower”, and the Company the “Guarantor”, entered into a Senior Credit Facility agreement of US300,000,000 with a syndicate of banks consisting of ANZ Banking Group Ltd, Calyon, Standard Chartered Bank, DBS
Bank Ltd, SMBC, United Overseas Bank Ltd, the Bank of Tokyo-Mitsubishi UFJ Ltd Singapore branch, Oversea-Chinese Banking Corporation Ltd, PT Bank Ekspor Indonesia “BEI”, PT Bank Mandiri Persero Tbk “Mandiri” Singapore branch as
Mandated Lead Arrangers, SMBC as Facility Agent, PT ANZ Panin Bank as Common Security Agent and DBS Bank Ltd and PT Bank DBS Indonesia as account banks.
This facility has a final maturity date of 30 June 2013 and is payable on a quarterly basis. This facility bears interest at LIBOR plus a certain percentage.
This credit facility was used for the purpose of refinancing all the bank and other third party loans, and to finance the capital expenditures, working capital and acquisition of shares in SMP.
Under this senior credit facility agreement, SIS is required to maintain certain financial ratios, with which SIS was in compliance as at 31 December 2009. SIS is also required to comply with certain terms and conditions on Articles of
Association, the nature of business, corporate actions, financing activities and others. As at 31 December 2009, the outstanding balance of this facility was US230,360,000 2008: US235,110,000, which is
repayable according to the following schedule:
Payment schedule Payment amount
year US
2010 46,200,000
2011 50,850,000
2012 53,250,000
2013 80,060,000
230,360,000 This loan is collateralised by:
- all trade receivables owned by SIS;
- all equipment, machinery, vehicles, and other moveable goods owned by SIS;
- insurance claim on all equipment, machinery, vehicles and other moveable goods owned by SIS;
- all Principal Agreements owned by SIS;
- land and buildings owned by SMP; and
- corporate guarantee from the Company.
c. PT Bank OCBC NISP Tbk
On 3 December 2009, SDM obtained a term loan facility of US15,000,000 from PT Bank OCBC NISP Tbk. This credit facility was used for purpose of refinancing a portion of Barito Channel project cost which was previously financed by ATA. The
facility has a final maturity date of five years after first withdrawal and is payable on a semester basis. The loan bears interest at 3-month Singapore Interbank Offered Rate “SIBOR” plus a certain percentage and is payable on a quarterly basis.
Under the loan agreement, SDM is required to maintain certain financial ratios, with which SDM was in compliance as at 31 December 2009. SDM is also required to comply with certain terms and conditions on Article of Association , the nature of
business, corporate actions, financing activities and others. The loan is collateralised by:
- All trade receivables owned by SDM at the maximum of US15,000,000;
- Insurance claim which covers the risk of operating loss;
- Letter of Comfort from Adaro.
As at 31 December 2009, the outstanding balance of this facility was US15,000,000 which is repayable according to the following schedule:
Payment schedule Payment amount
year US
2010 1,251,000
2011 2,250,000
2012 3,000,000
2013 3,499,500
2014 4,999,500
15,000,000
Adaro Energy Annual Report 2009 177 www.adaro.com
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 539
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008
Expressed in million Rupiah, unless otherwise stated
22. SENIOR NOTES 2009
2008
Face Value 7,520,000
- Discount and issuance cost
142,518 -
Amortisation of discount and issuance cost 2,617
- Exchange difference due to financial statement translation
251 -
7,379,848 -
On 22 October 2009, Adaro issued a Guaranteed Senior Notes “Senior Notes” amounting to US800,000,000, with a selling price of 99.141. The Senior Notes will mature in 2019. The Senior Notes bear a fixed interest rate of 7.625 and be payable semi -
annually in arrears on 22 April and 22 October of each year commencing on 22 April 2010. The Senior Notes are unconditionally and irrevocably guaranteed by the Company.
The Senior Notes were issued under an indenture between Adaro, the Company and The Bank of New York Mellon, as the trustee. The Senior Notes have been rated “Ba1” by Moody’s and “BB+” by Fitch. The ratings reflect the rating agencies assessments of
the likelihood of timely payment of the principal and interest on the Senior Notes. The proceeds of the Senior Notes will be used primarily to finance the expansion of the Group’s infrastructure to support the
expansion of Adaro’s coal production capacity The Senior Notes and the guarantee of the Senior Notes are unsecured and rank equally with all existing and future unsecured
senior debt of Adaro and the Company, respectively. The Senior Notes and the guarantee of the Senior Notes are effectively subordinated to all of Adaro’s and the Company’s existing and future secured debt to the extent of the assets securing the debt.
The Company’s guarantee of the Senior Notes are structurally subordinated to all liabilities including trade payables of all of the Company’s other subsidiaries, which are not initially issuing guarantees for the Senior Notes. The Company may in the future
designate its subsidiaries to guarantee the Senior Notes.
The Senior Notes were listed on the Singapore Exchange Securities Trading. Adaro and the Company are required to comply with certain terms and conditions on incurrence of indebtedness and issuance of
disqualified stock, designation of Subsidiary’s Guarantor, merger, consolidation and sales of assets, certain transactions with affiliates, business activities and others.
23. DERIVATIVE INSTRUMENT
As at 31 December 2009, the derivative contracts had an unvafourable fair value as follows:
2009 2008
Interest rate swap 159,437
208,745 Fuel swap
8,231 -
167,668 208,745
Less: current portion 127,163
51,112 Non-current portion
40,505 157,633
a. Interest rate swap
On 19 March 2008, Adaro entered into an interest rate swap contract with DBS Bank Ltd, with notional amounts of US600,000,000. The transaction underlying this contract is the Syndicated Loan facility agreement amounting to
US750,000,000 refer to Note 21a. Based on this contract, DBS Bank Ltd receives payments of quarterly fixed interest at a rate of 2.945 per annum and pays to Adaro a floating interest rate of US-LIBOR. This contract will be due on 7 December
2012. This transaction is an effective cash flow hedge for purposes of the accounting standards.
As at 31 December 2009, this contract had an unfavourable fair value of US16,027,619 2008: unfavourable fair value of US19,063,426.
In January 2009, SIS entered into several interest rate swap contracts with United Overseas Bank Ltd and PT Bank OCBC Indonesia, with notional amounts of US208,305,000. The underlying transaction is the Senior Credit Facility refer to Note
21b. Based on these contracts, United Overseas Bank Ltd and PT Bank OCBC Indonesia receive payments of quarterly fixed interest at rate of 1.850 - 1.865 per annum and pay a floating interest rate of three-month US-LIBOR to SIS. These
contracts will be due on 28 June 2013. These transactions are effective cash flow hedge for the purpose of the accounting standards.
As at 31 December 2009, this contract had an unfavourable fair value of US933,851.
