Bakrie to sell Arutmin stake within two months

JAKARTA (JP): Bakrie and Brothers Group said Thursday it was optimistic the sale of its 20 percent stake in East Kalimantan coal mining firm PT Arutmin Indonesia could be signed within the next two months.

The business group's president, Tanri Abeng, said negotiations on the sale were underway.

"I hope we can sign the deal within the next two months," he said but refused to say who would buy its stake.

He said there had been five bidders so far, three from Japan, one from the United states and one from Indonesia.

Tanri said Bakrie had provided the terms of reference for the bid.

Bakrie spent about US$ 40 million buying its 20 percent stake and hoped to pocket about $80 million from its sale, he said. The remaining 80 percent is owned by Australia's Broken Hill Proprietary Ltd.

He said Bakrie was selling its stake to free up capital to finance the company's expansion. "We need cash for the expansion of our core businesses."

The company's core businesses are telecommunications, infrastructure and plantations.

Tanri said selling its stake in Arutmin was more effective than waiting for earn dividends from the firm in five years.

He said coal mining was a long term investment so one could not expect to earn dividends soon, he said.

"We need cash right now while the company cannot not provide it for us," he said.

Earlier this year Bakrie sold its 49 percent stake or 10.5 million shares in PT Indocopper Investama Corporation, which owns 9.6 percent of PT Freeport Indonesia, to the Nusamba Group, which is chaired by the politically well-connected Mohammad 'Bob' Hasan.

Bakrie sold its stake for Rp 724.24 billion (around $302.7 million).

Tanri said Bakrie planned to invest about Rp 900 billion this year to boost its core business, of which Rp 450 billion would be for telecommunications, Rp 370 billion for infrastructure and Rp 80 billion for plantations.

Bakrie's unaudited net profit was about Rp 193 billion in 1996, up from Rp 120 billion in 1995.

This year, net profit is projected to be Rp 416 billion. (09)