Bakrie sells share in Kasei to Mitsubishi

JAKARTA (JP): The extraordinary shareholders meeting of publicly listed PT Bakrie & Brothers decided on Friday to sell the company's entire stake in chemical producer PT Bakrie Kasei Corporation (BKC) to Mitsubishi Chemical Corp. for US$51.1 million.

Bakrie agreed to sell all of its 378,637 shares, or 25.54 percent of BKC, to repay part of the company's debt, that totals $1.052 billion.

"However, the $51.1 million in proceeds can only cover about five percent of Bakrie's total debt," Bakrie's chief commissioner Aburizal Bakrie told reporters.

With the sales, Mitsubishi's shares in BKC will increase from the current 57.37 percent to 82.91 percent.

BKC was founded in 1991 to produce purified terephthalic acid. It has assets valued at $477 million.

Its net sales as of June this year, reached $167.6 million with operating profits of $12.9 million.

To appraise Bakrie's share of BKC, Bakrie appointed independent consultant Deloitte Touche Tohmatsu.

Aburizal said that Mitsubishi was willing to pay more for BKC's 25.52 percent stake, which according Deloitte was worth only between $31 million and $48 million.

Using what it called the cash flow approach, Deloitte valued BKC's total stake at between $121 million and $188 million.

"Mitsubishi was willing to pay more, as a sign of appreciation for our good working relations," Bakrie's spokesman Lalu Mara Satriawangsa later told The Jakarta Post.

With the deal, Bakrie's total debt would drop from $1.052 billion to about $1 billion, he said.

Mara said that of the $1 billion in debt, 90 percent was owed to foreign creditors and 10 percent was owed to the Indonesian Bank Restructuring Agency (IBRA).

He said that because all of the creditors had agreed to settle the debt through a debt for equity swap, the proceeds from the BKC divestment would be kept in an escrow account until another agreement is made.

Aside from Mitsubishi, BKC is also owned by Japan Asia Investment Co. Ltd, and Japan Asia Venture Fund.

Bakrie was founded in 1951, and is the majority shareholder of eight subsidiaries in diverse business fields.

Its wholly owned subsidiaries include cast iron producer PT Bakrie Tosanjaya, corrugated steel sheet manufacturer PT Bakrie Corrugated Metal, asbestos and cement pipes producer PT Bakrie Building Corporations, welding steel pipe company PT Bakrie Pipe Industries, power transmission & energy provider PT Bakrie Power Corporation, telecommunication firm PT Bakrie Communications Corporation, plantation firm PT Bakrie Sumatra Plantations and profile iron producer PT Trans Bakrie. (bkm)