Bakrie Sells Bumi Stake to Northstar for $1.3 Billion

By Naila Firdausi and Arijit Ghosh

Nov. 1 (Bloomberg) -- PT Bakrie & Brothers, the investment arm of Indonesia's richest family, agreed to sell its stake in Asia's biggest coal exporter to an affiliate of U.S. buyout firm TPG Inc. to help raise $1.3 billion to pay debt.

The Jakarta-based company, controlled by the family of Welfare Minister Aburizal Bakrie, will sell its 35 percent stake in PT Bumi Resources to Northstar Pacific, Director Ari Hudaya said today in Jakarta.

Bakrie & Brothers is selling the Bumi shares at a 61 percent discount to the price it paid to buy them from the Bakrie family, after the value of the coal mining company, which is pledged as security for the debt, plunged in a global rout last month. The sell-off drove Bumi down 32 percent on Oct. 6, before trading was halted, prompting concern Bakrie might fail to meet loan obligations. The company is paying $1.2 billion of debt early.

``This can be interpreted as a positive development for shareholders of Bumi,'' said Agus Yanuar, chief investment officer at Jakarta-based PT Samuel Aset Manajemen, which manages about $152 million. ``It removes the uncertainty.''

Bakrie doesn't have an option to buy back the shares, Hudaya said. The company is also in talks to sell stakes in other units, he added. Bakrie & Brothers last month raised $56 million selling stakes in PT Bakrieland Development and PT Bakrie Sumatera Plantations.

`No Speculation'

``Even though the debt hasn't matured we don't want to speculate with the current uncertain condition'' and the sooner debt is repaid the better, Hudaya said adding that the deal was signed last night. ``Northstar is quite a huge company with good reputation and is familiar with Indonesian business.''

Northstar controls PT Bank Tabungan Pensiunan Nasional, Indonesia's biggest lender to pensioners, in a venture with TPG, founded by David Bonderman.

Bakrie & Brothers' filings show borrowings -- backed by shares in affiliates including Bumi, PT Energi Mega Persada and PT Bakrie Sumatera Plantations -- from at least seven financial companies including JPMorgan Chase & Co. and ICICI Bank Ltd., India's second-largest lender.

Bumi rose to a record 8,550 rupiah on June 12 in Jakarta trading, making it Indonesia's most valuable company at the time. Shareholders have since lost $13 billion as the stock plummeted.

Bakrie & Brothers bought Bumi shares from the family for 36.9 trillion rupiah ($3.4 billion) or 5,432 rupiah apiece. On Oct. 6 the stake was valued at 14.8 trillion rupiah, 60 percent less than the purchase price.

Companies in India, Malaysia, Australia and the Philippines, including San Miguel Corp., that nation's biggest food and beverage company, bid to buy Bumi, Bakrie said on Oct. 23.

Tata Power Co., India's biggest electricity generator outside state control, owns a 30 percent stake in PT Kaltim Prima Coal and PT Arutmin Indonesia, the two coal mines owned by Bumi.

To contact the reporters on this story: Arijit Ghosh in Jakarta at aghosh@bloomberg.net; Naila Firdausi in Jakarta at nfirdausi@bloomberg.net