Release: Bakrie & Brothers and Northstar conclude terms of strategic partnership
Friday, December 26 2008 - 12:52 AM WIB
As has been committed to the regulators and all other stakeholders, both parties agreed to form a 70:30 joint venture which holds 21.4 percent of PT BUMI Resources Tbk.
?We are delighted that this process is finally concluded to the committed schedule.
Above all, the most important benefit for BNBR is that not only have we executed this agreement with Northstar, but solved the outstanding debt problem also. This was following the global economic meltdown at the end of September 2008, which unfairly impacted the share price in our group of companies,? says BNBR President Director Nalin Rathod.
The agreement will involve BNBR holding the following ownership of about:
1. PT Bakrie Sumatera Plantations Tbk (UNSP) : 42.6%
2. PT Bakrie Telecom Tbk (BTEL) : 48.3%
3. PT Bakrieland Development Tbk (ELTY) : 14.8%
4. PT Energi Mega Persada Tbk (ENRG) : 43.2%
5. PT Bumi Resources Tbk (BUMI) : 70% of 21.4%
In addition, BNBR has option to buy back 7.8% of ELTY from Avenue Capital and 4.2% of BUMI from Ancora Group.
BNBR will continue to carry US Dollar debt of around 197million and Rupiah debt of around 425billion, as well as convertible bond (CB) valued at Rp 4.26trillion. The shares will be charged to CB and debt holders until CB are converted into shares within one year at the latest. This concludes the portfolio rationalization program successfully as it reduces BNBR group's debt significantly from USD1.2 billion when the program was announced.
The CB will be convertible at Rp 100 ? Rp 110 per share and will be subject to all relevant regulations and other approvals. The US Dollar debt has a maturity date of 3 years.
?The agreement has been reached on the backdrop of a closer and long term strategic relationship between BNBR and Northstar,? added Nalin.
Further, Nalin emphasized that in spite of several mid-course adjustments, the final agreement achieves all the initial objectives that each party has set out at the beginning.
?For BNBR the main objective is to resolve the debt situation through a portfolio rationalization program while preserving as much of shareholders value given the very unfriendly market situation. And we have done it in eleven weeks. Whilst for Northstar the most important objective is to maximize return to their investors, which is also achieved by becoming a strategic partner with a group like BNBR,? Nalin says.
Both parties are committed to close the transaction as soon as possible. (end of release)