Relevant Documents:Pertamina FY’20 FinancialsThe
ultimate parent company of PT Saka Energi Indonesia (Saka), PT Pertamina (Persero), held an investor call today, June 22, which Reorg attended, during which Pertamina’s management reaffirmed that Pertamina is committed to the sustainability of Saka’s operations and ensuring that Saka remains a going concern. The call was helmed by Pertamina CFO Emma Sri Martini, as well as Pertamina’s SVP Corporate Finance and SVP Controller and Reporting.
Pertamina’s management confirmed that the maturity of the $360.7 million of shareholder loans outstanding as of March 31 from PT Perusahaan Gas Negara Tbk (PGAS) to Saka will be extended, though the amount being rolled over and the new maturity date for the shareholder loan is yet to be confirmed.
As reported, Pertamina is supportive of extending the maturity of PT Perusahaan Gas Negara Tbk’s (PGAS) - Saka’s direct parent entity - shareholder loan to Saka, as well as to work with Saka to improve operational efficiency.
In addition, Pertamina’s management stated that Pertamina will primarily provide support to Saka through its gas subsidiary, PGAS, though it did not rule out lending support to Saka directly.
Current options being considered to improve Saka’s operations include resource sharing, a transfer of Saka’s PGAS shareholding or assets to Pertamina’s upstream entities, bringing in a technology partner to maximize the value of Saka’s assets, and divestments at asset or shareholder level, management said.
As reported, Pertamina has outlined multiple possibilities that would improve Saka’s liquidity position, including the extension of PGAS’ shareholder loan to Saka, setting up a sinking fund, and piecemeal asset sales of Saka’s production sharing contracts.
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Reorg’s valuation model which estimates a net present value of Saka’s existing operations to be around $520 million to $570 million as a conservative base case, implying a recovery value in the low to mid 70s for Saka’s due 2024 notes.