HK firm gets stake in Bakrie & Brothers

HK firm gets stake in Bakrie & Brothers

By Frits H. Pangemanan

HONG KONG (JP): AIG Investment Corp. (Asia) Ltd., a Hong Kong
financial company, signed an agreement here yesterday to purchase
PT Bakrie & Brothers shares worth US$125 million to support the
latter's expansion programs.

The chairman of Bakrie & Brothers, Aburizal Bakrie, told
reporters after signing the agreement with the president of AIG
Investment, Cesar C. Zalamea that yesterday's deal allows the
Hong Kong company to hold 6.2 percent of Bakrie & Brothers
shares.

The president and chief executive officer of Bakrie &
Brothers, Tanri Abeng, explained that the funds from AIG
Investment will be used to take over the Bakrie family's stakes
in some companies, including copper mining company PT Indocopper
Investama Corporation, pipe producer PT Seamless Pipe Indonesia
and the coal mining company PT Arutmin Indonesia.

"It means that the 49.3 percent stake of PT Bakrie Investindo
in Indocopper Investama, the 37.52 percent stake of PT Bakrie
Nusantara Corp in Seamles Pipe and the 20 percent stake of Bakrie
Investindo in Arutmin will be all acquired by Bakrie & Brothers,"
he said.

Tanri pointed out that the acquisition of the three firms has
been approved both by minority shareholders of Bakrie & Brothers
and by the Capital Market Supervisory Agency (Bapepam).

Debt

Part of the funds will also be used to finance Bakrie &
Brothers's plan to purchase Wisma Bakrie, which is 100 percent
owned by the Bakrie family, and to repay part of its $100 million
debt, Tanri said.

"The sales of the shares indicate that the Bakrie family will
focus operations in certain core businesses," he said.

Bakrie & Brothers, which has a number of subsidiaries,
including PT Bakrie Communications, PT Bakrie Electronics Company
and PT Radio Telepon Indonesia, currently holds total assets of
around $1.5 billion.

Zalamea said that the deal with Bakrie & Brothers was AIG
Investment's second equity participation in Asia.

AIG Investment has provided $60 million for a cellular
telephone project in the Philippines, he said.

He said his company, with $1.5 billion in total assets, is
committed to increasing investments in Indonesia in the future,
considering that the Indonesian economy has a bright future.(fhp)