Two foreign firms bid for Bakrie's stake in Arutmin

Two foreign firms bid for Bakrie's stake in Arutmin

JAKARTA (JP): PT Bakrie & Brothers is set to sell its shares
in coal mining company PT Arutmin Indonesia in the second quarter
of this year, the company's president said yesterday.

PT Bakrie & Brothers president Tanri Abeng said there had been
two overseas bids including one from Japan.

PT Arutmin Indonesia, 20 percent owned by Bakrie & Brothers
and 80 percent by Australia's Broken Hill Proprietary Ltd, is in
West Kalimantan.

Tanri Abeng said Bakrie & Brothers's investment in Arutmin was
worth $40 million and it expected to sell its stake for between
US$40 and $50 million.

"The total transaction value must be over Rp 118 billion," he
said.

He said the aim of selling the company's stake in PT Arutmin
Indonesia was to get fresh money to finance the company's
expansion. "We need cash for the expansion of our core business,"
he said, adding that mining was not one of the company's core
businesses.

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

PT Bakrie & Brothers plans to invest about Rp 900 billion this
year in its core business. It will spend Rp 450 billion for
telecommunications, Rp 370 billion for infrastructure and Rp 80
billion for plantation business.

He said coal mining was a long term business so one could not
expect to have dividends in the short run.

Tanri said in PT Arutmin Indonesia's case the company might be
able to pay dividends in 2000.

"Though coal mining provides a bright business prospect for
the company. It will take a long time to get dividends from the
coal mining firm," he said

This was why Bakrie & Brothers had to sell its stake to get
fresh cash. "We need cash right now while the company could not
provide it for us," he said.

Asked if the timber tycoon Mohammad (Bob) Hasan of Nusamba
Group and Jusuf Merukh had expressed interest buying Bakrie &
Brothers' stake in Arutmin, Tanri said: "We were told not to
mention names," he said.

But Bakrie & Brothers did plan to expand its business into
other noncore businesses, namely the petrochemical and power
businesses, he said.

He said the power and petrochemical industries had a stable
future. "The power business is like telecommunications," he said.

Bakrie & Brothers recently sold its 49 percent stake (10.5
million shares) in PT Indocopper Investama Corporation (IIC),
which owns 9.6 percent of PT Freeport Indonesia, to the
politically well-connected Nusamba.

The business group, 80 percent owned by three foundations
chaired by President Soeharto, 10 percent by Bob Hasan and 10
percent by the President's eldest son Sigit Hardjojudanto,
recently closed a deal to buy 50 percent of PT Askatindo Mineral
Karya, Bre-X's local partner in the disputed Busang gold mine in
East Kalimantan.

The transaction was worth Rp 724.24 billion (US$302.7
million). (09)