Bakrie to list its infrastructure units

Bakrie to list its infrastructure units

JAKARTA (JP): Bakrie and Brothers plans to float its telecommunication and infrastructure units on the local stock exchanges in 1998.

The group's chairman, Aburizal Bakrie, said the listing was part of the group's restructuring.

"But I'm not saying this is my commitment but it's my own vision," he said Thursday evening.

Aburizal said the company's listing plan would add to the company's value and shareholders' investments.

He said he hoped the float would raise the group's market capitalization which is listed on the Jakarta and Surabaya stock exchanges.

Bakrie's market capitalization is about US$900 million.

The listing of the telecommunication and infrastructure units was expected to lift the group's capitalization to between US$1.5 billion and $2 billion, Aburizal said.

"That's the ideal market value according to us," he said.

He said the telecommunication and infrastructure businesses were run directly by the group. "It means that the two business arms should operate as independent companies before they offer their shares to the public," he said.

Aburizal said the group had hired Salomon Brothers of the United States to assess the initial public offering plan.

He said he hoped this could be done by mid-year.

Aburizal said the group's automotive industry division would launch a minivan in early December which would retail for between Rp 65 million ($27.3 million) and Rp 70 million ($29.4 million) each.

"The price is competitive compared to other minivans in the category," he said.

He said the minivan would have 45 percent local content in the first year, 50 percent in the second year and 60 percent in the third year.

Vehicles with higher local content will be cheaper because of lower sales tax.

The Bakrie group through its subsidiary PT Bakrie Investindo has invested about US$100 million in the project.

Bakrie Investindo has assigned Britain's Creative Automotive Design to design the van which will be made at the PT Ningz Pacific Motor plant in the Lippo Industrial Estate in Cikarang, West Java, of which Bakrie Investindo owns 10 percent. ST- Logistics Singapore will support it by supplying components.

The van, which will be have a 2,000cc gasoline engine or a 1,900cc diesel engine, will be able to carry eight passengers.

Bakrie Investindo has spent $20 million designing and producing prototypes.

The firm expects to sell about 10,000 vans in the first year of production and 15,000 in the second year. (09)