Bakrie agrees to sell shares to Nusamba

JAKARTA (JP): PT Bakrie & Brothers has agreed to sell 49 percent or 10.5 million shares in PT Indocopper Investama Corporation (IIC), which owns 9.6 percent of PT Freeport Indonesia.

The business group's president Tanri Abeng said yesterday Bakrie had received the offer from the politically well-connected Nusamba Group to buy its stake in Indocopper for Rp 724.24 billion (around US$302.7 million).

"The transaction is based purely on business considerations," he said when asked if the deal was made because of government pressure.

Earlier reports said the publicly listed Bakrie group was under pressure to sell its stake in Indocopper. Aburizal Bakrie, the chairman of the Bakrie group previously denied his business group would sell its Indocopper stake.

Freeport Indonesia, which operates a huge gold and copper mine in Irian Jaya, was 80 percent owned by McMoran Copper and Gold of the United States, 10 percent by the Indonesian government and 10 percent by Bakrie through Indocopper, which bought its stake for $213 million in Jan. 1992.

Indocopper and the government both had their stake reduced to 9.36 percent in Freeport when they did not increase their equity after McMoran raised its capital in the following years.

In Dec. 1992, Bakrie & Brothers sold 49 percent of its stake in Indocopper to McMoran for $212 million. This reduced its stake to 49 percent from 88 percent. The remaining 2 percent is held by Bakrie group subsidiary Bakrie Investindo.

"The Nusamba transaction is a profitable one and Bakrie has obtained significant capital gain from the deal," Tanri said, adding that around $200 million of the proceeds would be used to pay company debts while the remainder would be used to finance the company's investment plan.

Tanri admitted negotiations with Nusamba Group were done through consultants Salomon Brothers. "Bob Hasan did not negotiate directly with us, but their management negotiated with our management," he said.

He said the negotiation process started in December last year, after Salomon Brother provided its evaluation to Bakrie & Brothers.

"Nusamba Group was generated through Salomon Brothers," he said adding the Nusamba group's management had approached Salomon Brothers.

He said both its consultants -- Salomon brothers and Forest International -- recommended the firm sell in Indocopper.

He said in Feb. 1996, Bakrie & Brothers asked Salomon Brothers in New York to make an evaluation of the investment.

The result, which was revealed in October last year, said Bakrie & Brothers should sell its stake at Indocopper.

Besides that, the firm also asked Forest International to make another evaluation.

He said Forest International concluded Bakrie & Brothers should sell its stake at Indocopper. "Indocopper is not included in the core business of Bakrie & Brothers," he said.

Bakrie & Brothers covers three main core business areas: telecommunication, infrastructure and plantations.

Meanwhile the Nusamba Group,80 percent owned by three foundations chaired by President Soeharto, 10 percent by Bob Hasan and 10 percent the President's eldest son Sigit Hardjojudanto, recently closed a deal to buy 50 percent of PT Askatindo Mineral Karya, Bre-X's local partner in the Busang gold mine.

Tanri Abeng also said yesterday the firm also planned to sell its stake in the coal mining company PT Arutmin in West Kalimantan.

PT Arutmin, 20 percent owned by Bakrie & Brothers and 80 percent by Australian Broken Hill Proprietary Ltd, is also not included in the core business of the company.

He said there were four potential buyers who have 'stalked' the firm's stake at Arutmin.

Bakrie & Brothers's investment was worth $40 million at Arutmin and the company expected to sell its stake at a price of between $40 and $50 million. (09)