Bumi Modern to raise Rp 297b from right issue

JAKARTA (JP): Publicly listed PT Bumi Modern, which manages the five-star Hyatt Regency hotel in Surabaya, East Java, will issue one-for-three right shares in December this year to strengthen its operation.

The company's president Sri Hoedojo Sontokusumo said yesterday that the bank expected to raise around Rp 297 billion (US$92.8 million) from the rights issue.

A part of the proceeds from the limited public offering would be used to partly acquire Le Meridien Tashkent hotel in Uzbekhistan, he told journalists following the company's extraordinary shareholders meeting, which approved the rights issue and acquisition plan.

Ari Saptari Hudaya, the company's finance director said that the company would issue 594 million new shares in the right issue.

He said around Rp 108 billion of the proceeds from the rights shares would be used to buy into Le Meridien hotel, which is currently owned by Bakrie Investindo.

The remainder would be used to repay loans and strengthen the company's working capital, he said, adding that Bumi Modern's loans currently reached Rp 166 billion.

According to the company's annual report, Bumi Modern has suffered losses since 1994.

The company incurred losses worth Rp 11.52 billion in 1994. This increased to Rp 24.86 billion in 1995 and Rp 25.21 billion in 1996.

Its losses in the first semester of this year has reached Rp 15.35 billion.

Ari said that most of the losses were caused by an oversupply of hotel rooms in East Java and the company's total debts, which reached US$60 million as of June.

Ari said that with the planned acquisition and rights issue, the company expected to reduce its loss to Rp 4.02 billion for next year's first semester.

He estimated the total loss of this year to reach Rp 7 billion.

PT Bumi Modern, founded in 1973, engages mainly in the hotel and tourist industry. The company's five-star hotel, Hyatt Regency located on 1.3 hectares of land in the prime business district in Surabaya, East Java, began its operation in 1979.

The hotel, operated by Hyatt International, has been enlarged from 265 rooms to 500 rooms. Since 1994, the company has also leased 12 service apartments to the business community in Jakarta.

Bakrie Capital acquired the company from life insurance company AJB Bumiputera in August.

The company, which was listed in the Jakarta and Surabaya stock exchanges, is currently 52 percent owned by PT Bakrie Capital Indonesia, 13.33 percent by PT Dana Tabungan dan Asuransi Pegawai Negeri (Taspen), 12.89 percent by PT Jan Darmadi Corporation, 12.89 percent by the public and 8.89 percent by PT Jamsostek. (08)