Bakrie forms company to take over Arutmin shares

Creditors of PT Bakrie Brothers Tbk have established a new company PT Ekakarsa Yasakarya to take over the business group?s 20 percent stake in coal mining company PT Arutmin as part of its debt restructuring, Kompas reported on Wednesday.

Irwan Sjarkawi, the president of Bakrie and Brothers said that the transfer of the coal company?s 20 percent stake would mark the completion of the business group?s debt restructuring program, which would become effective on November 2001.

The debt restructuring which would be made through a debt to equity swap with the creditors will reduce the Bakrie family?s ownership in the business group to five percent, he said.

PT Arutmin, which operates a coal mining concession in South Kalimantan, is 80 percent owned by BHP-Billiton of Australia and 20 percent by local partner Bakrie and Brothers.

BHP-Billiton plans to sell its 80 percent in the coal mining company. 31 percent of the 80 percent stake will be sold under the government?s mandatory divestment program.

Irwan said that the Bakrie business group also transfer the ownership in other companies including PT Bakrie Sumatera Plantations, PT Bakrie Kasei Corporation and PT Bakrie Electronics Company as part of the debt to equity swap.

"As the consequence of the debt to equity swap, the Bakrie family ownership in the business group and the public will be diluted to five percent,? he said. The other 95 percent are owned by a number of international finance institutions including the Indonesian Bank Restructuring Agency (BPPN), Exim Bank of the United States, Chase, Hughes Networks, Itochu Corp, Deutsche Bank, Lehman Brothers and more than 100 other finance companies. (*)