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)