Bakrie announces acquisition plan
Bakrie announces acquisition plan
JAKARTA (JP): PT Bakrie & Brothers (B&B) said yesterday it
will acquire several companies included in its core businesses
and procure new equipment for business diversification.
Bakrie & Brothers is a holding company with three core
businesses -- telecommunications, infrastructure facility
manufacturing and plantations.
"Bakrie & Brothers will acquire PT Indocopper Investama
Corporation (IIC), PT Seamless Pipe Indonesia Jaya (SPIJ), PT
Arutmin Indonesia (AI) and PT Catur Swasakti Utama (CSU)," Tanri
Abeng, president of the company, told reporters after an
extraordinary meeting of its shareholders here yesterday.
"We will also procure new equipment to manufacture 24 inch
pipe and SAW pipe as part of our product diversification
program." Tanri said.
The company's president said the acquisition and procurement
of equipment will be financed by the proceeds of its rights share
issue.
Tanri said B&B will sell 189.54 million rights shares at Rp
6,500 (US$3) per share to raise Rp 1.2 trillion ($555.56 million)
in fresh funds. The current price of B&B's shares is Rp 8,200
($3.79) per share on the Jakarta Stock Exchange and Rp 7,500
($3.47) per share in the Surabaya Stock Exchange.
He said 49.64 percent of the funds will be used to acquire
49.01 percent of IIC's shares, 12.05 percent to acquire 37.52
percent of SPIJ's shares, 3.56 percent to acquire 20 percent of
AI's shares, 3.52 percent to buy all of CSU's shares and the rest
for debt repayment.
Tanri said the debt payment will eliminate B&B's debts of Rp
250 billion ($115.74 million), thereby reducing the debt equity
ratio of Bakrie Group to 0.5 percent from 2.5 percent at present.
He furthermore said with the decrease in the debt equity
ratio, the company's debt servicing costs will decline sharply,
contributing to its profitability.
The company's after-tax profit rose by 600 percent to Rp 26.3
billion ($12.18 million) last year from Rp 4.2 billion in 1992.
During the same period, the company's total assets rose to Rp
824.92 billion ($381.91 million) from Rp 372.61 billion. (02)