Bumi Resources (BUMI) - Potential Swap Deal?

Bumi Resources (BUMI) – Maintain BUY
Price: Rp3,325 – Target Price: Rp3,950

Potential Swap Deal?

  • Vallar to acquire 75% BRMS’s stakes from BUMI at Rp850/share
  • CB issuance in exchange of BRMS shares.
  • BUMI will loose income from NTT.
  • Potential swap deal – CIC loan to CB
  • Assuming CIC loans reduce up to US$600mn and US$1.9bn, we estimate interest saving around US$124mn-387mn pa.
  • BUMI is trading at 15.2x-12.9x PER’11-12, with price target Rp3,950/share.
  • Maintain BUY