JAKARTA: Moody's Investors Service sees no immediate impact on Bumi Resources Tbk's Ba3 corporate family rating, and Bumi Investment Pte Ltd's Ba3 senior secured notes rating from theproposed sale of a 75% stake in Bumi Resources Minerals Tbk to Vallar PLC.Vallar will issue approximately US$2.1billion of convertible bonds to Bumi as consideration. The transfer is expected to be completed in third quarter 2011.The outlook of the ratings remains stable."The disposal of a majority stake in Bumi Resources Minerals streamlines Bumi's operational structure and allows it to fully concentrate on its coal operations in Indonesia. It also reduces Bumi's exposure to the execution, political and expropriation risks pertaining to BRM's exploration and development projects in high risk jurisdictions," says Alan Greene, a Moody's Vice President and Senior Credit Officer, in a press release today.From a cash flow perspective, Moody's does not expect any material impact arising from the proposed sale as BRM previously raised funds for its development independently without any recourse to Bumi. After the completion of the transaction, Bumi Resources Mineral's debt will be excluded from Bumi'sadjusted financial metrics, but the overall improvement in leverage will not be significant given the size of Bumi's total debt.Vallar owns 25% of Bumi through a share swap with the Bakrie Group in March 2011. Vallar intends to increase its stake in Bumi up to 50% and obtains control during 2011 via a further share swap with willing Bumi shareholders.BRM holds interest in iron ore, zinc, lead, phosphate, diamond, and gold concessions located in Indonesia and Africa. Most of its projects are currently at the feasibility study or exploration stage and are likely to require substantial investments to bring them to production stage overthe medium-to-long term. (msw)

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