Bakrie & Brothers sells assets to pay foreign debts
Bakrie & Brothers sells assets to pay foreign debts
JAKARTA (JP): PT Bakrie & Brothers has concluded the sale of 4
million "class I" shares in Iridium LLC to American International
Group Inc (AIG) to pay $250 million in foreign debts which fall
due at the end of this year.
The company said in a statement on Sunday that it now holds
3.5 million "class I" shares at Iridium following the sale.
However, the company did not reveal the value of the
transaction, saying only that it covered its foreign debt due
this year.
An executive at Bakrie & Brothers said the company's debt due
at the end of this year totaled $250 million.
The statement said the transaction was part of a financial
restructuring designed to help the company survive the economic
crisis.
"The management of PT Bakrie & Brothers strongly believes that
this transaction will give a major push to the overall financial
restructuring.
"The management is fully committed to completing the
restructuring as soon as possible," the statement said.
Bakrie & Brothers said last month that the companies nine
subsidiaries had a combined foreign debt of $1.2 billion.
Publicly listed Bakrie & Brothers' interests cover
telecommunications, plantations, finance and steel manufacturing.
Iridium LLC is a communications firm listed on the New York
Stock Exchange. Its shares were quoted at US$38 each on Friday
and hit $70 last May.
Bakrie's invested in Iridium in May 1997, when it bought 7.5
million shares for around $100 million. The transaction was
partly financed by loans from Iridium.
Bakrie & Brothers' shareholding in Iridium is held through its
subsidiary PT Bakrie Communications Corp.
The statement said that Iridium has developed a global
wireless communications network that combines the worldwide reach
of 66 low-earth-orbit satellites with a land-based wireless
system.
This system enables subscribers to communicate using hand-held
telephones and pagers virtually anywhere in the world.
Bakrie and Iridium, together with Japan's IDD Corp, have
formed a joint venture to provide Iridium's services to the South
Pacific region.
The venture, called Iridium South Pacific Ltd, will provide
Iridium's services in Australia, New Zealand and other South
Pacific countries. (rid)