Bumi Modern rights issue gets cool response

The rights issue of PT Bumi Modern launched this week has received a cool response from the public investors due to the lack of information about the prospect of the oil company, which would be taken over by the publicly listed property and hotel operator.

Sources said that investors lacked interest to buy the company's rights shares because they were unsure about the prospect of the oil company, which would be acquired by Bumi Modern, part of the Bakrie Group.

But the spokesman for the business group, Lalu Mara Satriawangsa, said that the rights issue would continue despite the lack of the interest from the public investors because several companies had committed to becoming standby buyers of the rights shares which would not be bought by the investing public.

Foreign investor Long Haul Holding and Bakrie Investindo had agreed to become the standby buyer, he said.

Bumi Modern is offering some 16.61 million new shares in its ongoing rights issue in a bid to rise about Rp 9.3 trillion in fresh funds to take over seven oil wells in Yemen. (*)