Bumi Resources to acquire Bakrie?s stake in Arutmin for $35 million

PT Bumi Resources Tbk (Bumi) will need between US$35 million and $37 million to finance the acquisition of PT Bakrie and Brothers? 20 percent stake in coal mining company PT Arutmin Indonesia (AI), Bisnis Indonesia reported on Friday.

Bumi?s president Eddy J. Soebari said in Jakarta on Thursday that the price for the acquisition of the 20 percent stake in Arutmin would be equal to the $148.5 million the company would spend to take over the 80 percent stake of BHP Mineral Exploration?s stake in the coal mining company.

?The realization of the two acquisition is still waiting for an extra-ordinary shareholders meeting that will be held on November 29,? he said. He added that about 70 percent of the funds needed for the acquisition of the two companies? shares would be obtained from bank loans and the remaining 30 percent from internal sources.

Financial analysts, however, doubt the ability of Bumi Resources? financial capability to finance the acquisition, given the company?s current financial performance. Bumi, with total assets of about Rp 508.62 billion, seems to weak to acquire the acquisition, which for 80 percent of BHP stake alone, will reach RP 1.4 trillion.

PT Arutmin, the country?s largest coal producer base in South Kalimantan, is 20 percent owned by Bakri and Brothers and 80 percent by BHP. Bakrie and Bumi are partly owned by the Bakrie family. (*)