JP Morgan Arm to invest US$ 30 million in Assetz Property Group

JP Morgan Arm to invest US$ 30 million in Assetz Property Group

Global giant JP Morgan Asset Management has invested Rs 200 crore (about US$ 30 million) in Assetz Property Group, a firm that develops residential and commercial properties in Southern India.

“The capital will be given in the form of equity by JP Morgan,” said Akshay Dewani, the director of Assetz Property Group. “The money will then be used to build an 18.5 acre residential project in north Bangalore.”

With this investment, Assetz Property Group has secured about US$ 180 million for its upcoming projects.

Earlier investments include US$ 116 million from venture capital firm Equis Funds Group Pte Ltd as well as private equity (PE) that is intended for its midmarket housing vertical.

Other investors comprise of property consultant Jones Lang, LaSalle’s real estate investment arm – Segregated Funds Group, Avenue Real Estate Fund and Amplus Capital Advisors Pct Ltd.

Headquartered in Singapore, Assetz Property Group for the most part develops residential assets in Bengaluru. But the firm also has plans to set up logistics and warehouse parks on the outskirts of Delhi, Mumbai, Chennai, Bengaluru, and Nagpur in the near future.

“We will be raising capital for logistics vertical first and plan our steps to have a 10 million square feet portfolio over the next four years,” Dewani added.

The company is diversifying into new segments and is in the process of forming commercial, industrial warehousing, and residential platforms to raise capital and expand its presence.

“We plan to have a multi-development platform as we have a good fundraising setup,” said Dewani.

Previously in March, the company had made an announcement regarding the launch of its township brand “Assetz Lifestyle”, under which it will build the group’s mid-market housing projects in the next decade.

In the next ten years, the group plans to build around 10,000 homes along the growth corridors of Bengaluru which is expected to generate a sum of around Rs 5000 crore in revenue from this business alone.

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By Vivian Foo, Unicorn Media

Indonesian coal producer Bumi Resources to restructure debt, paring down US$ 2 billion via Preemptive Rights offering

Indonesian coal producer Bumi Resources to restructure debt, paring down US$ 2 billion via Preemptive Rights offering

Indonesian coal producer PT Bumi Resources Tbk (BUMI) is looking to restructure its finance. The company plans to swap its debts for share, through raising IDR 26.9 trillion (about US$ 2 billion) through a rights offering.

The company will issue up to 29.1 billion new shares which are equivalent to 79.5 percent of its enlarged capital with Preemptive Rights (ER). These 29.1 billion shares will then be sold at about IDR 926 per share.

The transaction is expected to take place in 2017, fetching a total amount of IDR 26.9 trillion – part of the company’s efforts to restructure its US$ 4.2 billion debt.

The debt is intended to be reduced to US$ 1.6 billion, of which US$ 2 billion will be converted into shares, while the remaining will become Mandatory Convertible Bonds (MCB) or mandatory convertible bonds with a seven-years term.

Bumi Resources will use the proceeds to pay off debts to China Investment Corporation (CIC) along with eight other lenders. In an event that shareholders are reluctant to participate, the creditors will absorb all new shares issued, allowing Bumi Resources’ obligations to be converted into shares.

Later, no interests will be converted into shares of the company.

“This way, the old shareholders are given the opportunity to keep their ownership, but at a higher sum than the company’s current stock price. This is already stated in the agreement between the firm and creditors,” said finance director at Bumi Resources, Andrew Beckham, in Jakarta recently.

In the proposal, CIC would control 22.6 percent of Bumi Resources’ shares while 2016 bondholders would get 4.6 percent, and 2017 bondholders would obtain 10.6 percent. Credit Suisse would also get 3.6 percent, UBS 0.8 percent, Axis Bank 0.8 percent, Deutsche Bank 0.7 percent, and Raiffeisen Bank International 1.2 percent.

Bumi Resources primarily exports coal to China, Japan, and India. The Bakrie family-controlled firm supplies 25 percent of its coal to the domestic market and aims to boost coal production up to 100 million tonnes next year following this agreement for a debt-restructuring scheme.

The company forecast its production to increase by 5 percent more with the sales target also increasing by 7 percent in the near future, considering the surging demand for coal in the country as a result of the government’s ambitious electricity procurement programme.

Known as the most indebted coal miner in Southeast Asia, Bumi Resources has spent half the decade trying to reduce its debt.

In August, the company sold 50 percent of its stakes in unit Leap Forward Resources Ltd to two investors – Smart Alliance Ltd and Oceanpro Investments – in a US$ 90 million deal. The transaction was used to repay part of the company’s debts to Axis Bank Ltd, according to corporate secretary Dileep Srivastava.

On Friday, Bumi Resources shares increased by 0.68 percent to close at IDR 296 per share, against a 0.08 percent gain in the broader index.