📚 Acrostics Anatomy: Salim Group’s Bumi Turnaround
Indonesia’s Salim Group has turned around the operations and credit standing of Bumi Resources Minerals, which was long an asset of the Bakrie family.
📒 Quick Take: The Salim Effect (30 May 2025)
📸 Snapshot: Bumi Resources 1Q25 Results (1 June 2025)
💼 Brief Take: Bumi’s Quasi Reset (4 June 2025)
💼 Brief Take: Bumi Resources Minerals Ramps Up Turnaround (17 June 2025)
📒 Quick Take: Indonesia’s Concession Conundrum (3 September 2024)
📒 Quick Take: The Salim Effect
30 May 2025
Salim Group has turned around the operations and credit standing of Bumi Resources Minerals, which was long an asset of the Bakries.
Why two of Indonesia’s most prominent families struck an alliance.
Indonesia’s Salim Group has turned around the operations and credit standing of Bumi Resources Minerals (BRMS), which was long an asset of the Bakrie family.
Last week, BRMS announced that it had obtained a IDR 2 trillion (USD 122.7 million) syndicated loan to refinance existing facilities as well as to ramp up its copper and gold output. The loan has a tenor of 12 months and a 9.75% interest rate, according to the miner’s stock exchange filing.
This came on the back of a positive financial performance. BRMS’ revenue more than tripled to USD 63.3 million in the first quarter of 2025 from a year earlier, with gold sales accounting for 97% of the total. Operating cashflow also tripled to USD 20.6 million in the three months ended 31 March, according to its latest results.
The strong gold prices certainly helped, but the improvement should also be attributed to Salim Group, which took control of BRMS’ operations via mining veteran Agoes Projosasmito, according to a friend who’s familiar with the matter. Projosasmito, a long-time ally of Salim Group honcho Anthoni Salim, was appointed as BRMS’ president director in March 2022.
While Projosasmito has more than 15 years of experience in the mining industry, he cut his teeth even longer in the capital markets, with roles including President Director of Danareksa Securities and VP Director of DBS Securities over a period of 31 years, according to BRMS’ website. BRMS’ ability to get new loans is in large part thanks to the Salim-Projosasmito combo, according to an onshore banking friend.
Anthoni Salim and his family were ranked no. 5 on Forbes’ Indonesia rich list with an estimated net worth of USD 12.8 billion last year, but multiple banking friends said this is likely to be an underestimate because the clan’s true wealth is obscured by a wide array of shell companies, offshore trusts and proxies.
Their low-profile nature was likely shaped by the family history, as the group’s founder who was a business partner of fallen Indonesian president Suharto, Liem Sioe Liong, was publicly vilified because of their association. During the 1998 riots, Liem’s youngest son, Anthoni, and his lieutenant were described in Richard Borsuk and Nancy Chng’s book to have barely escaped with their lives by handing out wads of cash to the mob on the way to an airport in Jakarta.
In short, Anthoni Salim is not the type who’ll bang the drums about his investments unless it’s necessary. Salim Group was already involved with BRMS before the miner’s parent, Bumi Resources, kickstarted its second debt restructuring in late 2021. Despite Bumi’s narrative that the restructuring was going smoothly, the reality was it hit a wall because a Chinese bank wanted to be repaid faster in the cash waterfall and this was resisted by other creditors.
Bumi was also at a disadvantage because the coal company had previously struck a local in-court restructuring (PKPU) deal and its subsequent attempt to re-restructure the debt out of court risked being torpedoed by any holdout creditor. So when some creditors requested BRMS as collateral, Salim Group stepped up with a USD 1.6 billion equity deal alongside the Bakries.
For Anthoni Salim, buying out Bumi’s creditors likely served two purposes: Achieving a bigger coal scale through his exposure to Bumi, as well as securing metals for the electric vehicle supply chain via BRMS. In one fell swoop, the tycoon strengthened his grip on both a legacy power source and a sunrise industry.
As for the Bakries, they got to remove the Chinese Sword of Damocles that hung over them for years while retaining a stake in the crown jewel of the group. While Bumi’s creditors had a happy ending at least for now, the outcome for another Bakrie Group company, Visi Media Asia, was less joyful for its lenders.
📸 Snapshot: Bumi Resources 1Q25 Results
1 June 2025
Indonesian miner Bumi Resources has released its results for the three months ended 31 March 2025. These are some of the highlights.
🔸 Gold sales helped to offset coal dip: Revenue rose 12% to USD 348.8m from a year earlier, lifted by a jump in gold sales. Coal sales slightly dipped to USD 285.5m, but still accounted for 82% of total revenue. Nearly 35% of overall revenue came from Rwood Resources DMCC, a Dubai-incorporated energy and mineral trading company that has offtake agreements with Indonesian coal mines including Bumi’s subsidiaries Arutmin and Kaltim Prima Coal.
🔸 Cash dropped due to loan payments: Bumi’s net operating cashflow turned positive to USD 15.7m, from an outflow of USD 19.1m a year earlier, partly due to a sharp drop in income tax and other payments to the Indonesian government. However, cash and equivalents fell to USD 37.1m as of end-March, from USD 60.8m a year earlier, mainly on loan payments. Total liabilities stood at USD 1.2b, out of which USD 715.4m was due in the short term. The biggest chunk of current liabilities came from accrued expenses, including mining and maintenance expenses owed to contractors by Arutmin.
🔸 Bumi’s board is a balance between two Indonesian clans: The board of directors include representatives of two Indonesian conglomerates – Salim Group and Bakrie Group – which struck a formal alliance three years ago. Salim Group’s key representatives on Bumi’s board are Vice President Director Agoes Projosasmito and Director Phiong Phillipus Darma, while President Director Adika Nuraga Bakrie is the eldest son of Bakrie Group’s Nirwan Bakrie and Director Nalinkant A. Rathod is the honcho’s long-time lieutenant.
💼 Brief Take: Bumi’s Quasi Reset
4 June 2025
The “quasi reorganization” is aimed at resetting Bumi’s balance sheet so it’s not burdened by accumulated deficits.
While the move allows Bumi to start paying dividends to shareholders, it remains to be seen whether the miner could obtain funding more easily.
Indonesian miner Bumi Resources has secured approval from its shareholders for a proposed “quasi reorganization”, according to its statement on 3 June 2025. This will improve the company’s equity structure to “eliminate accumulated losses and represent the present value of its assets,” the statement said.
Eveline’s Take:
🔸 The move is aimed at resetting Bumi’s balance sheet so it’s not burdened by accumulated deficits, including from past interest expenses and transaction losses. Even though Bumi went through a local in-court restructuring (PKPU) to reduce its burden, it still had to pay interest on its restructured debt since December 2017. The miner settled that debt in October 2022 via a USD 1.6 billion private placement that was jointly subscribed by Salim Group and Bakrie Group.
🔸 A quasi reorganization is an accounting treatment that gives a so-called fresh start to a company by eliminating its deficits. Under a pro-forma implementation on its 2024 consolidated statements, Bumi would have offset USD 2.3 billion of deficits with its share premium, which is basically the amount that investors paid for the shares over their nominal value. This share premium would, in turn, drop to USD 999.5 million from USD 3.3 billion.
🔸 While it may seem like a reshuffling of the books, the reorganization has a real effect of paving the way for Bumi to start paying dividends to its shareholders. As of 31 March 2025, Mach Energy (Hongkong) Limited had a 45.78% stake, Chengdong Investment Corp 10.56% and Treasure Global Investment Limited 8.08%, while the rest was held by the public, according to Bumi’s results. Public records showed that Mach Energy and Treasure Global are the vehicles of the Indonesian conglomerates, while Chengdong Investment Corp is a unit of Chinese sovereign wealth fund China Investment Corporation (CIC).
🔸 Bumi also hopes the reorganization would make it easier to obtain funding and increase its trading liquidity. It remains to be seen whether a change in accounting would move the needle for potential investors or lenders, as this would depend on Bumi’s underlying operations and willingness to pay. Nevertheless, I wrote that Salim Group’s entry into the picture may improve the perceived creditworthiness of Bumi and its subsidiaries.
💼 Brief Take: Bumi Resources Minerals Ramps Up Turnaround
17 June 2025
BRMS is following the footsteps of its parent, Bumi Resources, which obtained approval from shareholders for a quasi reorganization.
The Indonesian miner is cranking up gold production, but it faces local opposition to its zinc and lead joint venture with a Chinese SOE in North Sumatra.
Bumi Resources Minerals (BRMS) is considering a quasi reorganization to overcome its balance sheet deficit of USD 760 million as of end-2024, Katadata reported on 16 June 2025. The Indonesian miner aims to accelerate the distribution of dividends to shareholders over the next five years, BRMS Director Herwin Hidayat reportedly said.
Eveline’s Take:
🔸 BRMS is continuing the pace of its financial and operational turnaround since Indonesian conglomerate Salim Group took control of the miner. It’s now following the footsteps of its parent, Bumi Resources, which obtained approval from shareholders for a proposed quasi reorganization earlier this month.
▪️ I wrote on 4 June that a quasi reorganization is an accounting technique that gets rid of a company’s accumulated deficits so it can start paying dividends to its shareholders. Under Article 71 of the Indonesian Company Law, a company can only distribute dividends if it has positive retained earnings after fulfilling its reserve obligations.
🔸 BRMS is also cranking up its gold production as the price of the metal has surged over the last few years amid the flight to safety. The miner aims to raise its gold output to 70,000-75,000 ounces by year-end, which would be a “conservative” target, Bisnis reported, citing Hidayat. BRMS sold 64,983 ounces of gold in 2024, according to its press release.
▪️ However, BRMS is facing local opposition to its joint venture with a Chinese SOE in North Sumatra. An Indonesian community is calling on Beijing to withdraw financial backing for the zinc and lead mine after the project lost its environmental permit, South China Morning Post (SCMP) reported. On 23 May, Indonesia’s Ministry of Environment and Forestry formally revoked the approval it had granted to Dairi Prima Mineral, which was in line with a Supreme Court ruling last August, according to SCMP. Dairi Prima is 51%-owned by China Nonferrous Metal Industry’s Foreign Engineering & Construction, while the remainder is held by BRMS.
🔸 In response to the Supreme Court ruling, BRMS said last year that Dairi Prima would take further legal steps while continuing its mining activities “in line with existing permits.” I wrote in September 2024 that carrying out business as usual while exhausting the available legal options is a common strategy in Indonesia. It’s uncertain whether the community resistance would yield a concrete impact given the lucrative potential of the project to both the Indonesians and the Chinese.
📒 Quick Take: Indonesia’s Concession Conundrum
3 September 2024
MUFG’s green loans to Indonesian tycoon Sukanto Tanoto’s Royal Golden Eagle face scrutiny.
Legal wrangling over Chinese-backed Dairi Prima Mineral’s zinc mine looks set to continue.
Muslim groups are taking over coal mines that were previously run by private companies.
Three news items that came out of Indonesia recently all revolve around the same topic: concessions.
First, MUFG’s green loans to Indonesian tycoon Sukanto Tanoto’s Royal Golden Eagle (RGE) are facing scrutiny. The group’s palm oil as well as pulp and paper businesses received USD 4.9 billion in sustainability-linked loans (SLLs) and other sustainability finance since 2021, according to Rainforest Action Network (RAN).
MUFG is estimated to have contributed USD 630 million in credit and underwriting since 2016, acting as a key lead arranger and sustainability advisor, RAN said. However, the NGO alleged that deforestation persisted in RGE’s palm oil operations, with over 1,475 hectares cleared inside the concessions of Asian Agri and known suppliers to the group’s palm oil trading arm Apical. (For RGE and MUFG’s responses, check out this post).
The heart of the matter is that the yardsticks of what makes a green loan green are seen as a black box. Lenders can set all sorts of goals, but who’ll ensure that the borrowers comply with these targets? Saying “Trust us, it’s green” doesn’t cut it anymore.
The second news is the decision by Indonesia’s Supreme Court to overturn the environmental clearance for Dairi Prima Mineral’s zinc mine in North Sumatra. The project is feared to unleash more than a million tons of mining waste or tailings into nearby villages, according to Yale Environment 360.
Dairi Prima is 51%-owned by China Nonferrous Metal Industry’s Foreign Engineering & Construction (NFC China) and the rest by Bumi Resources Minerals (BRMS). The latter is a unit of Bumi Resources, which is jointly controlled by Indonesian conglomerates Bakrie Group and Salim Group.
Responding to a query from the Indonesian bourse, BRMS said Dairi Prima will continue its mining activities “in line with existing permits.” It also plans to take further legal steps, claiming that some residents “fully support” the mine and that it will build an “environmentally friendly” waste management facility.
Carrying out business as usual while prolonging the legal wrangling is a common strategy in court disputes. Whether it’s the case here or not, the Dairi Prima saga seems far from over.
The third news is the trend of Muslim groups taking over coal mines in Indonesia: Muhammadiyah is set to receive concessions previously held by Adaro Energy or Bumi Resources unit Arutmin Indonesia, while the government has granted Nahdlatul Ulama the rights to manage a 26,000-hectare site in East Kalimantan that was run by another Bumi unit, Kaltim Prima Coal.
From a commercial perspective, how will these organizations secure the financing required for those mines and who will lend to them? If a lender tries to enforce the security of a defaulted loan, will this be labelled un-Islamic?
Enforcement is a real risk in Indonesia’s mining sector, if Standard Chartered’s soured USD 1 billion loan to Samin Tan’s Borneo Lumbung Energi & Metal was any indication.
In 2016, a local court overseeing the PKPU proceedings of Borneo Lumbung’s operating unit Asmin Koalindo Tuhup (AKT) threw out the bank’s claims of more than USD 628 million. AKT’s lawyer Hotman Paris successfully argued that it did not get approval from the Indonesian government to use the coal mine as collateral, thus invalidating the loan.
The lack of government approval didn’t seem to be a problem when AKT’s parent took the loan, not to mention that a bunch of loans to other Indonesian miners were similarly structured. Ironically, the Energy and Mineral Resources Ministry revoked AKT’s mining license in late 2017, citing its breach of regulations, and they were locked in a long dispute.
Concessions tend to be a minefield of controversies partly because of the strong nationalist sentiment attached (Indonesia’s 1945 Constitution states that natural resources belong to the state). There will likely be no dearth of court fights over the rights to these assets.