DETERMINING THE OPTIMAL CAPITAL STRUCTURE OF PT BUMI RESOURCE TBK

• Main Author: Ariefrahman Dzaki, Muhammad
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/70295
• Institution: Institut Teknologi Bandung

The energy crises that occurred in Europe and China led to an increase in demand for coal. This increase in demand was also accompanied by an increase in world coal prices. The increase in demand also occurred in Indonesia as one of the countries with the largest coal reserves in the world. In addition to demand for exports, domestic demand for coal is also still needed as energy to generate electricity. PT Bumi Resource Tbk, which is one of the companies with the largest coal reserves in Indonesia, supplies most of its coal domestically and most of it to China. So it is necessary to increase production to meet these demands. One way to increase production is by optimizing the company's capital structure. The proportion of debt and equity which constitutes capital will be the focus of the company going forward. The financial condition of a company that has a lot of debt, this will disrupt the company's future projects. Several times PT Bumi Resource Tbk was unable to pay off its debts. Based on calculations through the Damodaran theory, the optimal capital structure for companies in 2021 is a 30 percent debt ratio. This would maximize the firm's value by $1,709,478,366 at a WACC of 7.86 percent. As for the future, projections are made with three scenarios, namely the best scenario, the basic scenario, and the worst scenario. Through these three scenarios, the best scenario with a debt ratio of 10 percent produces the largest company value, namely $ 4,605,803,420 with the smallest WACC, namely 9.06 percent. There are several ways based on the Damodaran framework. First, a company can do a debt for equity swap by converting its debt into equity or by doing a private placement. Second, companies can negotiate with lenders. Third, the company can sell its assets to pay off its debts.