Bakrie rumored to buy Arutmin

Financially troubled local conglomerate Bakrie Brothers is said to be in negotiation with BHP-Billiton to acquire the latter?s 80 percent share in PT Arutmin Indonesia, a coalmine company with concession in South Kalimantan, according to industry sources.

Bakrie, which is run by Aburizal Bakrie, already holds 20 percent stake in Arutmin. The stake is now under control of its consortium of creditors, which force Bakrie to sell its various subsidiaries, including PT Arutmin Indonesia to service its huge debt.

?Based on preliminary information, BHP-Billiton and Bakrie had already in talks. However, we have yet receive formal notification on the matter,? Mahyudding Lubis, direcor of coal and mineral enterprises at the ministry of energy and mineral resources told Petromindo.Com via phone Tuesday.

He said ministry would soon asked for clarification.

Another ministry official, Boni Siahaan told Petromindo.Com that the ministry and officials from BHP-Billiton and Bakrie Brothers are going to hold a meeting Wednesday.

Under the coal contract of work, most coal contractors, including Arutmin, has to sell up to 51 percent of its shares to the Indonesian government, state companies, Indonesian-controlled private companies or Indonesian citizens after ten years of production.

BHP Billiton, as foreign holder of Arutmin has to divest 31 percent of its stake this year.

Earlier, ministry of energy and mineral resources said that BHP-Billiton valued the entire shares of Arutmin at US$ 252 million.

The sources slam Bakrie?s effort to buy Arutmin as unethic.

?How can they raise US$ 200 million financing to acquire 80 percent stake in Arutmin as everybody knows Bakrie Brothers is practically bankrupt and they get heavy discount on their debts?? said the sources.

BHP-Billiton and Bakrie?s officials were not immediately available for comment.

Arutmin is the country?s fourth largest coal producer with the output of nine million ton in 2000. (godang/alex)