JAKARTA/HONG KONG: Glencore , the world's biggest commodities trader, is expected to sign a deal within days to give an $800-$900 million loan to Indonesia's Bakrie Group to help it refinance its debt, sources with knowledge of the deal said on Thursday.
The deal will give Glencore more marketing rights for coal from Bakrie-controlled Bumi Plc and will be backed by part of the Bakrie Group's 47 percent stake in the coal miner. It will also give Glencore an option to turn the loan into an equity stake if Bakrie cannot repay the debt, one of the sources said.
The sources declined to be identified because the talks were not public.
The marketing rights could be extended to other Bakrie non-coal assets such as for zinc from Bumi Resources Minerals, one of the sources said.
Glencore, several of whose executives are in Jakarta to help close the deal, has been seen as a frontrunner and likely partner for the Bakries since news of the refinancing talks emerged last week, with analysts pointing to its relationship with the family and existing coal marketing agreements.
The deal would tighten Glencore's grip on coal sales from Indonesia, the world's largest thermal coal exporter.
The Indonesian group has held re-financing talks for $1.35 billion of debt after mandatory repayment of the loan -- a one-year deal arranged by Credit Suisse in March to consolidate Bakrie family debts -- was triggered by a sharp drop in Bumi's London shares that took the price below 850 pence last month, sources have said.
The lenders, which include hedge fund Noonday Asset Management, wanted an immediate solution, one source has said.
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