Fri, 19 Aug 1994

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).


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)