Northstar takes over Bakrie & Brothers debts
Saturday, November 29 2008 - 01:41 AM WIB
The press release did not provide much details about the deal, but Bakrie officials emerging from a full-day negotiation talk on Friday, said that Northstar would buyout $575 million of Bakrie's debt to Oddickson.
Patrick Waluju, CEO of Northstar, the local arm of US-based buyout giant Texas Pacific Group, said that the next step would be a debt-to-equity coversion in coal mining company PT Bumi Resources.
No more details were available.
Bakrie&Brothers, the listed holding company of the family of Coordinating Minister of Social Welfare Aburizal Bakrie, owed more than $1.2 billion debts that would mature in April of 2009. Bakrie were forced to put up some shares in various companies including in Bumi Resources up for sale to raise proceeds for the debt repayment. Most of the debts were owed to Oddickson, initially totaling $1.08 billion.
But the amount significantly dropped to about $575 million thanks to "currency gains" and repurchase agreement settlement, according to Nalinkant Rathod, president of Bakrie & Brothers. He added that Bakrie hopes to be able to settle the remaining $200 million by year-end.
Northstar agreed on November 1 with Bakrie & Brothers to acquire the latter's 35% stake in Bumi Resources, the country's largest coal mining company, for $1.3 billion or more than Rp 2,000 per share.
However, fears about the Bakrie group's debt, coupled with the bursting of the commodity bubble and global market sell-off, knocked Bumi's share price down from an all-time high of Rp 8,750 to a 2009 low of Rp 640 in November, or less than one-tenth of the peak value.
This has prompted speculation that Northstar would seek for a price renegotiation with the Bakries or even walk out of the deal.
It is still not clear how much shares Northstar would have in Bumi, which controls two major coal mines, PT Kaltim Prima Coal and PT Arutmin Indonesia. (denny)