Bakrie agrees to sell shares to Nusamba
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)