Barito Pacific Plans to Acquire 51% of Star Energy

By Berni Moestafa

Aug. 19 (Bloomberg) -- PT Barito Pacific, the timber company that controls Indonesia's only ethylene maker, said it plans to buy at least 51 percent of PT Star Energy this year in a transaction that may exceed 5.1 trillion rupiah ($555 million).

Barito wants to add oil and gas to its portfolio, Agustino Sudjono, the company's investor relations manager, said in a telephone interview in Jakarta today. Barito may seek a loan to finance the transaction, he said.

The planned purchase would be Barito's second this year after the company bought 76 percent of PT Tri Polyta Indonesia in June. Jakarta-based Barito, which runs a timber operation on Borneo island, entered the petrochemical industry with the acquisition of PT Chandra Asri in December last year.

``Acquisition is a quick way to boost a company's assets,'' said Lanang Trihardian, an analyst at PT Syailendra Capital in Jakarta. Even so, ``for a company that a year ago was just running a timber operation, the expansion into petrochemicals and oil and gas may be too fast.''

Sudjono said Barito plans to buy oil from Star Energy to maintain a more stable margin amid fluctuating fuel prices. Oil is a raw material for petrochemical products.

Barito's stock rose as much as 2.2 percent to 1,410 rupiah in Jakarta trading. It was at 1,390 rupiah at the noon break.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net