Aditya Birla to bid in Bumi Resources
Thursday, January 5 2012 - 05:15 AM WIB
People close to the development said that senior executives from the Birla group are evaluating the option to bid for about 10-15% of the equity of PT Bumi along with an offtake arrangement. The transaction could be valued at over Rs 1,000 crore.
The Jakarta-based PT Bumi, the world's largest exporter of thermal grade coal, has been talking to interested companies to offload its equity and raise funds for prepaying debt. The group, owned by the Bakrie family, one of Indonesia's largest business houses, had recently agreed to sell 47% in Bumi Plc, one of its subsidiaries, for about $1 billion.
"It is an option we are looking at," said a senior executive from the Aditya Birla Group. "I wouldn't say we've made up our mind, but to have a share in one of the (world's) largest coal companies would be an attractive option," he added. The group would look for a position on the board but not be directly involved in the day-to-day running of the company, the executive said.
A bid by the group would be interesting as it would run counter to the general unease among foreign companies over investing in Indonesian coal mines. A recent government decision to impose tax on coal exports has unsettled foreign companies. Power projects, dependant on Indonesian coal, have suddenly seen their costs shoot up, ruining profitability projections. (*)