Bumi-EMP merger plan will be concluded in July

The president director of PT Bumi Resources, Ari S. Hudaya said the company was preparing the details of the merger plan with PT Energi Mega Persada (EMP) which was expected to be concluded in July this year.

Speaking to reporters on Monday, Ari said that the merger would be carried out through a share swap mechanism so that all of the proceeds from the divestment of coal companies could be fully used to finance expansion plan.

"There will be no cash involved in the merger. The proceeds from the divestment will be used for expansion to get maximal returns to the shareholders," he was quoted as saying by Kompas daily.

Ari said that he hoped that merger plan would face no objection from the Capital Market Supervisory Agency (Bapepam) because it would not cause any dilusion to the share values of both companies.

Ari said that the merger plan would be part of the company's business consolidation to be carried out following the divestment of its coal mining companies PT Kaltim Prima Coal and Arutmin.

The company announced last week that it had reached an agreement with a consortium led by a local company to sell its entire stake in the country's two coal miners for US$3.2 billion.

According to the company, the company would also merge with oil and gas company PT EMP to carry out its expansion into the oil and gas sector. At present, EMP operates a number of oil and gas fields in the country, while Bumi has significant interests in the number of oil blocks in Yemen.

"With the merger, we hope we can carry out the expansion more effectively," he said.

Bumi and EMP are both controlled by the Bakrie family. The Bakrie family is currently the majority shareholder of the publicly listed Bakrie and Bothers. (*)