Dunia tidak berhenti berkelana, sebab manusia sebagai penunggangnya tak berhenti mencari. Jadi, apa yang kamu cari?

Kamis, 04 April 2019

Insomnia Reads: Indonesia's Shifting Coal Money

Kamis, 04 April 2019 04.40 No comments

Tonight insomnia is presented by: Indonesia's Shifting Coal Money Report by Global Witness

Two different cases, involving two different indonesian coal companies, connected to two different political big shots. Couldn't care less about the latter, for it's all around twitterland, anyway. What sparks interest is how the aftermath of Panama Papers remains on stage. Global Witness released two reports, each covering these cases, under the big frame of Indonesia's Shifting Coal Money.

The first report covered the offshore dealings of Berau Coal company. This report highlighted the large payments made by Berau Coal to an obscure offshore company, Velodrome Worldwide Ltd. It seems the political figure involved got a hold of this payment from end-to-end.

How so? Recapital Advisers, investment company co-founded by this figure, took over Berau Coal in the end of 2009. Few days later in early 2010, Berau Coal signed an agreement with Velodrome Worldwide Ltd to provide assistance for Berau with US$ 2 million in monthly fee. This payment to Velodrome is highly questionable for the service provided to Berau Coal is unclear. These payments continued even when Berau Coal suffered loss in 2012 amounting to US$ 180 million. Falling prices of world coal did contribute to this loss, but it also due to US$ 150 million in payments that need to be write off as 'exceptional costs' for they couldn't be explained properly.

2012 is when the contract between Berau and Velodrome came to an end. In 2011, Recapital sold majority of its ownership in Berau to Bumi Plc, a giant coal mining company which is a joint venture between Nat Rothschild and Bakrie. It is by the end of the investigation held by a law firm hired by Bumi Plc, then the agreement between Berau and Velodrome was terminated, almost 12 years prior to the originally agreed completion date.

Berau Coal then in 2013, now under the control of Bumi Plc, stated that the value of the agreement with velodrome is unclear to the business. While in the other hand, stating it failed to identify the ultimate beneficiaries of those aforementioned transactions. It's for the identities of Velodrome owners were not public at the time of the payments. Why, because Seychelles, an east african country where Velodrome is incorporated, required no public disclosure of this information.

This mystery remained unsolved until the Panama Papers leak in 2016 got released by ICIJ. This leak apparently revealed how the same political figure who co-founded Recapital had been Velodrome's sole shareholder and director, from its incorporation in October 2007 until May 2009. Even though the ownership got transferred after that period, and there is still no evident leak indicating the ownership status of Velodrome at the period of the payments by Berau Coal between January 2010-December 2012.

At the end of the game, after this scandal broke out and resolved in Singapore court, Berau Coal defaulted in some of the bonds it issued and the bondholders are still negotiating over the repayments of these debts. While Rothschild walked away from the fiasco with a damaged rep.


The second case is different in nature, that it seems to be less monumental and directly damaged investors as in the first case. So the next political figure under the spotlight in the second report owns 99% shares of Toba Sejahtera. Just until November 2016, Toba Sejahtera retained its majority 72% ownership of Toba Bara Sejahtera, a mid-sized coal mining company. Because in November 2016, Toba Sejahtera sold 61.79% of Toba Bara shares it owned to Highland Strategic Holdings, a Singapore company.

But that's not all. Highland Strategic Holdings is owned by Watiga Trust Pte Ltd, also a Singapore-based company. Watiga Trust is a trust company which holds assets on behalf of other investors. In other words, as was mentioned in this report, neither Watiga Trust and even Watiga Trust's owners, be the ultimate beneficial owners of Highland Strategic Holding, thus Toba Bara Sejahtera's majority owners as well.

Watiga Trust is no more than a trust company. A trust company which holds the shares of Toba Bara Sejahtera on behalf of other people, who owned Highland ultimately. And it's not possible to identify this mysterious investors from public documents. Henceforth, Toba Bara majority shares now belonged to hidden buyers.

Other than the ownership transfer of Toba Bara in 2016, the report has no other major issues to cover. The report did mention about how Toba Bara obtained a contract to build or run a large number of coal-fired power stations, and the dwindling coal price in the other hand. But with a little endeavor to elaborate Toba Bara financial performance aspects post ownership transfer in 2016.
Interesting informations can sure be unearthed through diving in Toba Bara's 2016-2017 annual report. Here you can download Toba Bara's 2012-2017 annual reports, just in case you got sparked into doing your own research.

So, here we go. As we can observe here, Toba Bara has 3 main business segment. The key business segment that contributed the biggest portion to company profit is of course coal mining. Initiating power plant as new segment in 2016. And minor plantation segment by child entity.

For a mid-class coal company, Toba Bara was quite expansive. That as of 2017, Toba Bara has six child entities under its wing. It is an interesting fact that in 2016, Toba Bara signed a shares trading agreement with Toba Sejahtera to increase its ownership of GLP company.

GLP or Gorontalo Listrik Perdana was established in 2016 to manage the development of Coal-fired Power Plant (CFPP/PLTB) projects in north Sulawesi. In July 2016, GLP obtained 25-years of Power Purchase Agreement (PPA) with PLN under Independent Power Producer (IPP) scheme.

With GLP and its CFPP projects wrapped around its finger, in 2017 Toba Bara made its fortune by booking twice of its operating profit in 2016, even though there only was 20% increase in its revenue.

Financial support is also wide open that Toba Bara and GLP acquired financing facilities from Bank Mandiri (state-owned bank), related to the aforementioned power supply contract. As presented below, Toba Bara's total bank loans tripled compared to the amount it booked in 2016.

Whoever it is, the unknown buyers of Toba Bara shares start riping now that its investment comes to fruition.

Sabtu, 16 Maret 2019

Attack on Titan Season 3: Interim Review

Sabtu, 16 Maret 2019 03.53 No comments

Just started watching Season 3 of Attack on Titan. It seems Wit Studio tweaked the order of the original storyline a bit. The story was made apparently more compact, instead of having a really slow pace - what once made me hesitant to watch this season in the first place.

This arc is all about politics. It covered how the underground revolution by the scouting legion to overthrow the fraud monarch slowly took its shape. Nothing about wars waged against titans like the previous arc. The only fight was among themselves fellow citizens of the wall.

So this is where the story enters the slope of the plot. Which may inflict boredom for the anime audience. Although every detail stands out as a strong and bold piece to the overall development of the story. Not to mention this is also where we view the monarch as the anti-hero. The point where the story evolved from the simple black and white conflict to a continuously flipping coin as the story goes even further ahead.

I am not yet to completely observe whether this tweak on the story would successfully depict the complexity of the original storyline. So far, what seems to be gone missing in the new storyline is Erwin Smith's role as a magnificent tactician behind the whole revolution.

Minggu, 03 Maret 2019

The Space Race: A Sought for Inter-Planetary Colonisation?

Minggu, 03 Maret 2019 03.29 No comments
SpaceX' Crew Dragon launch from Florida. Source: Bloomberg

SpaceX launched unmanned Crew Dragon craft from Florida to International Space Station (ISS). As per Sunday (3/3/19) the craft is en route to a rendezvous with the ISS. This launch is a part of Public Private Partnership (PPP) between NASA and two private companies, Boeing and SpaceX. This partnership was announced in 2014, as a means of replacing the retired Space Shuttle in 2011.

This PPP is called Commercial Crew Program, aiming for the development and launch of human space transportation systems. Initially, these two companies should begin ferrying astronauts in 2017. Simply, a clear objective is to enable US government to fly to ISS without the need to buy seats on Russian Soyuz capsules. Ever since Space Shuttle retirement, US government had to pay $70.7 million for each one-way ticket transporting astronauts with Soyuz to, or from the ISS. It is the task of these two companies to make it a reality. SpaceX with the recently launched Dragon Crew spacecraft. While Boeing with it's CST-100, planned for unmanned launch in April this year.

In order to launch Dragon Crew spacecraft, SpaceX relied on its Falcon 9 rocket. Falcon 9 is a reusable rocket, designed and manufactured by SpaceX. Reusability of rocket is a key to reduce the cost required for space exploration. It was also Falcon 9, with which Nusantara Satu satellite was launched in mid-February this year. Using Dragon spacecraft and Falcon 9 rocket, SpaceX has paved a history in 2012 for being the first private company ever visited the ISS.

Another thrilling fact that I could grasp is how exploration as a basic human natural instinct hasn't ceased to exist. Keyword: colonisation. It's interesting how the same old spirit driving european countries to sent out explorative sea voyage missions in 15th centuries, which eventually lead to worldwide establishment of european colonies, is now fueling this inter-planetary-scale quest. Natural exploitation is of course inevitable, but perhaps we can feel better knowing that there is no currently known inhabitants of Mars, so those tragic history of the conquests of indigenous cultures is unnecessary.

But humans, by their intelligence and free will alone, will sure to be always giving birth to conflicts. Natgeo's docudrama, Mars, presented those possible disputes between private and public exploration teams, on the early habitation of Mars. Well, what do we expect? Those two parties came to Mars for different objectives. Yet they had this resource problems at hand to be resolved.

Rabu, 27 Februari 2019

China's Off-Balance Sheet Municipal Govts' Bond

Rabu, 27 Februari 2019 03.01 No comments
Total financial decentralisation should not be considered as a panacea. Especially when municipal govts are miles away from self-sufficiency. In China, local governments are given freedom to issue bonds in order to finance its activities. It is a rated bond, for both general purpose and project financing.

Now this is where it gets interesting. Some of these bonds are issued under off-balance sheet scheme, so it is nowhere to be found on local govts' financial positions. How come? In some cases, it's because the bonds are issued by local-government financing vehicles (LGFV). Say, for example, bonds issued by Qinghai Provincial Investment Group Co. (QPIG), govt-owned aluminium producer, as can be seen here. Bloomberg recently reported that QPIG had failed to wire funds for a coupon payment due Feb 22, suggesting it is currently in default status.

However, the use of these off-balance sheet LGFV bonds to finance municipal infrastructure construction had been forbidden since 2014. or this scheme is to be replaced by another form of off-balance sheet bonds. The project municipal bonds. Yes, you heard it right, those are local govt project-financing bonds, yet just like LGFV bonds, are excluded from local govts' book. It's considered as special bonds which issuance was meant to partake in the endeavor to reform the high-piling LGFV debts.

Under this scheme, the cash flows from underlying projects will cover for interest and principal payments. And investors shall shoulder any shortfall. For example Henan Province's 1.5 bill Yuan, 15-year project bond to finance new subways. It's offered at 3.79 percent interest rate. These off-balance sheet local government bonds are attractive. According to Bloomberg, these securities offerred corporate bond yields, yet being perceived among investors as having quasi-sovereign credit status. Even though, in 2015 China State Council had stated that these bonds issued by LGFV qualify as corporate bonds. Which means, no government backstop.

Despite the cases of the default risk that has befallen similar off-balance sheet instruments, yield-thirsty investors doesn't seem to budge. Bloomberg recent opinion column showed how AA rated, 3-year LGFV issues yield got compressed to 3.9 percent from 5 percent in just half a year.
Let's also remember how China local govts' had begun to swap those less-transparent LGFV debts into on-balance sheet bonds since 2015. In addition to current economic quarrel with US for the tariffs imposed to China, it is quite ironic seeing how Beijing holds up to the global one belt and road ambition.

Rabu, 20 Februari 2019

Senja di Haluan

Rabu, 20 Februari 2019 01.40 No comments

Kepada sepotong matahari senja di haluan
Ke sanalah sang kapitan hendak berpulang
Sekedar membuang sauh dan kembali utuh
Atau melucuti zirah baja lalu kembali merapuh

Sesaat berkas jingga terakhir telah beringsut
Meninggalkan sekujur geladak dalam kenyataan malam
Berlalu sang kapitan seraya menghunus pedangnya
Sederet rencana perompakan malam ini
Tidak lagi bisa ditunda barang semenit dua

Kepada sepotong matahari senja di haluan
"Esok aku akan menemuimu kembali,
menyesap segantang rindu yang tak tuntas.
Sampai kelak kudapati ujung samudera,
agar kita bisa bersama."

R.D. 2019