Bakrie still undecided over Freeport's stake

Bakrie still undecided over Freeport's stake

JAKARTA (JP): The chairman of the Bakrie Group, Aburizal
Bakrie, has again denied publicly listed PT Bakrie Brothers will
sell its stake in PT Indocopper Investama, a 9.36 percent stake
holder at PT Freeport Indonesia.

He said he was aware of a statement from Bakrie Brothers'
senior vice president and chief financial officer, Nalin Rathod,
that the company was negotiating to sell its stake in Indocopper.

However, Aburizal said he had not received any proposal from
the management of Bakrie Brothers about such a plan.

"They must convince me what the benefit is (of selling shares
in Investama)," Aburizal told journalists after attending a
meeting on partnership between large and small business at the
Ministry of Cooperatives and Small Enterprises.

Rathod said Tuesday it was not in the company's interest to
invest outside its core business, like in Freeport. Instead, it
should better strengthen its core business, namely
telecommunications and infrastructure.

He said Bakrie Brothers earned US$15 million in dividends from
its 51 percent stake in Indocopper in 1995, which he said was
less than expected.

Aburizal disagreed, and said the investment in Freeport
through Indocopper had so far yielded good returns.

"If they said they will sell it, they must compare it with the
future yields. How many percent will the return be? And if they
sell it, what will the money be used for?" Aburizal asked.

Freeport Indonesia, 80 percent owned by Freeport-McMoran
Copper and Gold of the United States and 10 percent each owned by
the Indonesian government and Indocopper, had operated in Irian
Jaya since 1973 under the first generation of mining contracts.

Aburizal said earlier the Indonesian government and Indocopper
now each held only 9.36 percent of Freeport Indonesia since they
did not increase their equity capital when Freeport-McMoran
recently increased its share capital and issued new shares.

Bakrie bought a 10 percent stake in Freeport in January 1992
for US$213 million. The Indonesian government had earlier bought
10 percent of Freeport.

The Freeport divestment was made as a condition of having its
mining contract renewed after it found about 1.1 billion more
tons of copper ore reserves in Irian Jaya. The contract was
renewed on Dec. 30, 1991.

In December 1992, Freeport bought 49 percent of Indocopper's
shares for $212 million, which was almost the same amount that
Bakrie had paid Freeport for its 10 percent stake in the American
company.

The Kontan business weekly tabloid raised the issue Bakrie was
about to sell its stake in Indocopper to the government. Later,
rumors said Bakrie was negotiating with timber baron Muhammad
(Bob) Hasan.

These rumors came amid mounting pressure on the government to
increase its stake in Freeport and the recent disputed Busang
gold mine in East Kalimantan.

Aburizal yesterday said he had not been pressed by the
government to sell Bakrie's controlling stake at Indocopper. He
said any decision to sell or to retain the stake would be decided
based on business, not political considerations.

"No one can press me on that matter. Only the management of
Bakrie Brothers can press me. If they consider selling the stake
in Indocopper would be in the interest of Bakrie Brothers, I
would just endorse it," he said. (rid)