Bank Mandiri Discloses Rp40 Trillion Credit Facility to Jhonlin, Rp17 Trillion Utilised

Bank Mandiri Corporate Secretary Group Adhika Vista said the facility was intended to finance capital expenditure and other funding needs of Jhonlin Group's coal business and supporting sectors.

In a disclosure to the Indonesia Stock Exchange (IDX) on Tuesday, the bank said the lending decision took into account the borrower's business prospects, financial performance, repayment capacity and ability to provide internal funding.

The bank said repayment would primarily come from cash flows generated by Jhonlin Group's coal operations and dividends from several operating subsidiaries. It added that it had tested the borrower's repayment capacity against changes in coal prices and production levels.

To mitigate repayment risks, Bank Mandiri said it had established a sinking fund mechanism to cover interest and principal instalments. The bank also monitors the use of the credit facility through business activity reports, in accordance with the financing agreement.

Shares in JARR and PGUN Used as Collateral

The disclosure followed a request for further clarification from the IDX dated October 21 concerning reports that shares in PT Jhonlin Agro Raya Tbk (JARR) and PT Pradiksi Gunatama Tbk (PGUN), companies affiliated with Jhonlin Baratama, had been pledged as collateral.

Bank Mandiri said the facility was secured by fixed and non-fixed assets, including shares in JARR and PGUN, as well as company accounts.

The lender said its collateral coverage ratio remained at 150%, based on the lowest intraday prices of JARR and PGUN shares over the preceding month.

The bank added that non-share assets used as collateral had been assessed by independent appraisers, while the inspection and legal registration of collateral had been handled by authorised parties.

To address the risk of falling share prices, Bank Mandiri said it had conducted sensitivity tests and included provisions in the credit agreement requiring additional collateral or a reduction in outstanding loans if collateral coverage fell below the required level.

The bank said pledged shares served as a secondary source of repayment, while the primary source remained cash flows from the borrower's business operations and those of its group. (Aiko Rahmadi)