Bakrie to acquire two subsidiaries
JAKARTA (JP): Shareholders of PT Bakrie and Brothers (B&B), a conglomerate controlled by the Bakrie family, yesterday approved its plan to acquire PT Bakrie Investindo's (BI) shares in two sister companies -- PT Indocopper Investindo and PT Arutmin Indonesia at US$287 million.
The company's president, Tanri Abeng, told newsmen after an extraordinary meeting of the shareholders that B&B will acquire 49 percent or 10,500,000 shares of BI's shares in Indocopper at $267.5 million and 20 percent or 1,600 shares of BI's shares in Arutmin at $19.2 million.
Indocopper was established in 1991 to acquire a 10-percent stake of PT Freeport Indonesia, an affiliate company of American Freeport-McMoRan Gold and Copper which has been granted rights by Indonesian government to explore and produce copper in Irian Jaya.
Aburizal, B&B's chief commissioner, reportedly spent $213 million for the Freeport stake and after 10 months, he sold half of the stake for $212 million.
Indocopper is now 50.1 percent owned by BI, 49 percent by Freeport-McMoRan Copper and Gold Inc. and the remainder by a number of businessmen. Indocopper was listed on parallel board in 1992.
Arutmin, established in October 1981, is engaged in the joint exploration and mining of coal deposits and other minerals in the 1.26 million hectares of mines in Southeast Kalimantan. The other side of the venture is PT Tambang Batubara Bukit Asam, a state- owned coal mining company.
Based on Arutmin's 1993 financial report, the company is 80 percent owned by America's BHP Minerals Exploration Inc. and 20 percent by BI.
Finance
According to Tanri, B&B's planned acquisition will be financed by the issuance of rights shares worth about $600 million. He did not specify the date for the rights issue.
Tanri said the funds to be raised from the rights offering will be used not only to finance the acquisition but also to finance B&B's business expansion and to repay its debts.
He said that after the rights issue, the ratio of the company's debt against its equity will improve from 5:1 to 1:2.
The shareholders also approved the company's proposal to purchase Wisma Bakrie, an eight-story building located in Jakarta's golden triangle district, from PT Catur Swasakti Utama (CSU), a company which is 92.5 percent owned by BI, at $19 million.
Tanri said that based on commercial and efficiency consideration, B&B will purchase the building from CSU because it has occupied one third of the building's space and planned to expand its occupancy.
The meeting also approved B&B's plan to issue 31,590,000 bonus shares for its existing shareholders.
Tanri said that every two existing B&B shares will be entitled for three bonus shares.
B&B, established in 1951 by the late Achmad Bakrie, operates in manufacture, telecommunications and plantations.
Achmad Badrie was Aburizal's father.
B&B's revenues increased from Rp 213.7 billion in 1992 to Rp 311.1 billion in 1993 and its after-tax profit rose from Rp 4.1 billion to Rp 26.4 billion.
In 1993, 64 percent of the company's income was generated from the manufacture division, 24.3 from plantations and 11.7 from telecommunications.
The company's assets increased from Rp 370.6 billion as of 1992 to Rp 824 billion as of the end of last year.(03)