Bakrie & Brothers to pay all debts with funds from rights issue

JAKARTA (JP): PT Bakrie & Brothers (B&B) will sell 263 million rights shares to raise US$600 million in fresh funds to completely repay its debts of Rp 250 billion ($116.1 million) and to acquire shares of four companies within its own group.

Tanri Abeng, president of the company, told reporters after an extraordinary meeting of its shareholders here yesterday that the company will acquire shares of PT Bakrie Nusantara Corporation, a seamless pipe manufacturer, at $65 million.

B&B will also acquire PT Bakrie Investindo's shares in PT Indocopper Investindo, PT Arutmin Indonesia and PT Catur Swasakti Utama, the owner of the Wisma Bakrie building, at a total of $306 million.

Tanri said the share acquisition and the debt payment will strengthen the capital of B&B, the holding company of the Bakrie Group which has three core businesses -- telecommunications, infrastructure facility manufacturing and plantation.

He said the debt payment will eliminate B&B's debts of Rp 250 billion, thereby reducing the debt equity ratio of Bakrie Group to 0.5 percent from 2.5 percent at present.

B&B's subsidiaries currently have total debts of Rp 700 billion.

Tanri said rights shares will be issued on June 20.

He explained that the Bakrie Group will concentrate on its core businesses to make itself a market leader.

The Bakrie Electronic Company, for example, in cooperation with PT Telkom, the state-owned domestic telecommunications service company, will develop an advanced rural telephone system that will offer low prices to customers. (yns)