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

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)