Bakrie to raise $1.07b to buy back mining assets

Indonesia?s diversified Bakrie Group will have to raise a total of US$1.07 billion (Rp 12.8 trillion) in cash to buy back shares in mining assets including a 29.2 percent share in IDX-listed coal giant PT Bumi Resources Tbk, 30 percent stake in coal miner PT Arutmin Indonesia, and 30 percent interest in PT Miratama Perkasa, Investor Daily reported on Monday.

The paper quoted Bakrie Group spokesman Chris Fong as saying that the acquisition forms part of the group?s consolidation and restructuring process to create new opportunities and expansion in the future.

The group plans to acquire 30 percent shares in Arutmin from India?s Tata Power for US$500 million, the transaction of which is expected to be completed in May of this year. The group currently controls 70 percent of Arutmin.

Bakrie also plans to acquire 30 percent shares in Miratama from Tata Power?s IDX-listed subsidiary PT Sumber Energi Andalan Tbk for $120 million, the transaction of which expected to be completed in April.

Prior to the aforementioned acquisitions, Bakrie will first complete the long-planned buy back of 29.2 percent shares in Bumi Resources for $501 million as part of a separation deal from London-listed coal miner Asia Resources Minerals Plc (ARMS). This transaction is expected to be completed in May 21. Bakrie is scheduled to transfer the required funds to ARMS on May 19. The group has already deposited $50 million.

Chris said that the 72-year old group has been tested to recover from difficult times, and thus would not have difficulties in raising the required funds.

He added that Bakrie has raised $228 million to fund the ARMS separation transaction. The remainder $223 million will be obtained from the sale of the group?s 23.8 percent shares in ARMS to Ravenwood Acquisition Company Ltd, which is controlled by ARMS outgoing chairman Samin Tan. (*)