Bumi Resources to buy back 3.75% of its shares

Indonesia?s largest coal producer PT Bumi Resources plans to buy back up to 780 million shares or about 3.75 percent of the company?s shares at a maximum price of Rp 5,000 per share in order to improve the company?s earnings per share and return on equity.

In a brief prospectus, Bumi said that it would allocate about Rp 3.9 trillion (US$456 million) to finance the buyback using the company?s excess free cash flow. The price for the buyback will be based on the average price of the company?s shares for 90 days before the date of the purchase. The estimated price is Rp 5,000 per share.

Bumi shares rose 1 percent to close at Rp 2,625 per share on Tuesday. The shares are down 13 percent so far this year

The company said that the buyback would be carried out both through and outside the stock market. Local securities company PT Danatama Makmur has been named to help with the buyback.

Bumi will seek shareholders? approval during a meeting which would be held on Sept, 26. The buyback will be completed within 18 months after the shareholders? approval.

At present, Vallar Investments UK Limited owns 32.42 percent of Bumi?s shares with the other 67.58 shares being held by the public. (romel)