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)