Standby buyers buy most of PT BM shares
JAKARTA (JP): Publicly listed PT Bumi Modern announced on Wednesday the majority of the rights shares it offered during its recent limited public offering had been purchased by standby buyers, because most of the existing shareholders did not exercise their rights.
The company's president, Jay Abdullah Alatas, said here on Wednesday 99 percent of the rights shares were purchased by Long Haul Holding Ltd. and Minarak Labuan as standby buyers.
"The rights issue involved only Rp 60 billion in cash as the two companies paid for the shares with their entire stake in Gallo Oil Ltd. of the United Kingdom," he said when discussing the process of Bumi Modern's takeover of the oil company.
Bumi Modern issued about Rp 9.3 trillion (about US$1.03 billion) in rights shares early this year to purchase Gallo Oil Ltd., which has two concession blocks in Yemen -- the 2,856- square-kilometer Block R-2 in East Al-Maber and the 7,417-square- kilometer Block 13 in Al-Armah.
Bumi Modern operations director Joesril A. Hainim said Bumi Modern would begin a seismic survey at Block R-2 this month to allow the company to start drilling by September this year.
Joesril said Bumi Modern had some $16 million in cash to cover the costs of the survey and drilling.
"Block R-2 has about 568 million barrels of risk-reduced (oil) reserves," he said.
Block 13 has about 500 barrels of risk-reduced reserves, according to Joesril, adding that the seismic survey for this block would be carried out later this year.
He said Bumi Modern would not have a positive cash flow until 2001.
Bumi Modern, with total assets of Rp 349 billion as of the end of 1999, posted a net income of Rp 12.3 billion in 1999, as compared to a net loss of Rp 22.8 billion the previous year.
The company has not provided a financial statement since the rights issue, however it did disclose the change in the composition of its shareholders.
Bumi Modern's shareholders following the rights issue are Long Haul Holding Ltd., with a 73 percent share, Minarak Labuan, 22 percent, with the public holding the remaining 5 percent.
Prior to the rights issue, PT Bakrie Capital Indonesia, a holding company within the Bakrie Group, was the majority owner of Bumi Modern.
There has been some suspicion that Bumi Modern's rights issue was part of a scenario to bail out the failing Bakrie Group.
The head of research at PT Socgen-Crosby Securities Indonesia, Lin Che Wei, said the acquisition of Gallo Oil by Bumi Modern was a ploy by the Bakrie Group to transfer Gallo Oil's assets into liquid security assets through "manipulated pricing" on the Jakarta Stock Exchange.
He said that with Bumi Modern's rights issue, the Bakrie Group would be able to pay its debt to the Indonesian Bank Restructuring Agency (IBRA) using its Bumi Modern assets, whose book value would inflate following the acquisition.
"This whole process is actually aimed at boosting the assets of the company to resolve its debts with IBRA," Che Wei said.
The Bakrie Group's communications manager, Lalu Mara Satria Wangsa, said Bumi Modern followed all the regulations during the rights issue, therefore any public suspicions of the company were baseless.
However, he said negotiations between Bakrie Group and IBRA regarding a debt settlement were ongoing.
He confirmed that Bumi Modern was one of the companies within Bakrie Group that had been put forward as part of the group's proposed debt settlement.
Meanwhile, Bumi Modern shareholders approved on Wednesday the plan to change the company name from PT Bumi Modern to Bumi Resources, subject to approval from the Ministry of Law and Legislation.(udi)