BIPI delays acquisition of Astrindo

Indonesia-listed firm PT Benakat Petroleum Energy Tbk (BIPI) has delayed the realization of the company?s plan to acquire coal-mining infrastructure service provider PT Astrindo Mahakarya Indonesia, Kontan daily reported on Thursday.

BIPI signed an agreement to acquire PT Astrindo Mahakarya for US$600 million in December, last year. In the agreement, BIPI should complete the acquisition process in March. However, BIPI has asked for a delay in the closing of the acquisition transaction for three to five months or around August, this year.

BIPI president director Muhammad Suluhuddin Noor said the closing of the acquisition transaction was delayed because BIPI was unable to secure all the funding needed for the acquisition.

He said that BIPI had changed the allocation of warrant issuance proceeds for business expansion including the acquisition of PT Astrindo Mahakarya instead had been using them for working capital earlier planned.

The total process would reach about Rp 942.5 billion if all investors used their rights to buy the warrants, he said, adding that execution period is between August 11, 2010 and February 8, 2013.

In addition, the acquisition was also delayed because BIPI also needed to wait for the completion of a due diligence audit on Astrindo, which could result in the drop in the acquisition value, he added.(*)