By Naila Firdausi and Arijit Ghosh
Nov. 3 (Bloomberg) -- PT Tambang Batubara Bukit Asam, the holder of a quarter of Indonesia's coal reserves, will join an affiliate of U.S. buyout company TPG to buy a stake in PT Bumi Resources for $1.3 billion, President Director Sukrisno said.
Bukit Asam and Northstar Equity Partners plan to buy the stake in Asia's biggest exporter of power-station coal from PT Bakrie & Brothers, the investment arm of Indonesia's richest family, Sukrisno said in an interview in Jakarta yesterday. Bukit Asam climbed by the 20 percent limit in Jakarta trading.
Bakrie & Brothers will sell 35 percent of Bumi to pay debt, Director Ari Hudaya said on Nov. 1. The company is selling Bumi shares at a 61 percent discount to the price it paid to buy them from the family of Welfare Minister Aburizal Bakrie, after the value of the coal exporter, which is pledged as security for the debt, plunged in a global rout last month.
``With coal prices still high,'' the Northstar-led group is buying Bumi at a bargain, said Adi Hartadi, an analyst with PT Trimegah Securities in Jakarta.
Coal prices, which have declined 51 percent from a record, are still 23 percent higher than last year's levels. Bukit Asam's shares posted its biggest two-day gain since the stock started trading in December 2002 to 6,550 rupiah at 2:54 p.m. in Jakarta. Trading in Bumi shares has been suspended since Oct. 6.
Other state-run Indonesian mining companies may join the Northstar-led group, Sukrisno said, without giving names. PT Aneka Tambang and PT Timah are Indonesia's two other publicly traded state-controlled miners.
Aneka Tambang
Alwin Syah Loebis, president of PT Aneka Tambang, Indonesia's second-largest publicly listed nickel producer, said the company wasn't part of the Northstar group. Wachid Usman, president of PT Timah, the world's second-largest tin miner and refiner, couldn't be immediately reached on his mobile phone.
Bukit Asam and Northstar officials will meet today to discuss ``technicalities,'' such as shareholdings, Sukrisno said. The venture is likely to fund the purchase with cash because the companies don't have time to arrange a loan, he said.
Bakrie & Brothers said in a statement to the stock exchange on Nov. 1 it expected the deal to be completed in 28 days from when it signed the agreement with Northstar on Oct. 31. It will seek shareholders approval on Dec. 2.
Northstar's Walujo
Northstar, a private equity fund, controls PT Bank Tabungan Pensiunan Nasional, Indonesia's biggest lender to pensioners, in a venture with TPG, founded by billionaire David Bonderman. The fund is run by Patrick Walujo, who was a Japan- based senior vice president at PCCW Ltd. and has also worked as an investment banker at Goldman Sachs Group Inc.
``TPG is accommodating the government's interest by teaming up with Bukit Asam,'' said Norico Gaman, head of research at PT BNI Securities, which manages about $155 million in assets. ``They are also hoping that Bukit Asam will make it easier for them to obtain new contracts in Indonesia.''
The coal assets of Bumi, including PT Kaltim Prima Coal and PT Arutmin Indonesia, must be ``saved'' because Bumi runs the mines under government contract, Vice President Jusuf Kalla said on Oct. 24.
Bakrie's Debt
Bakrie & Brothers' filings show it has 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 of Welfare Minister Aburizal Bakrie 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.
The sell-off in global shares last month 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.
Tata Power Co., India's biggest electricity generator outside state control, owns a 30 percent stake in Kaltim Prima Coal and Arutmin Indonesia.
``The coal sector's outlook is promising and Kaltim Prima's coal is of good quality,'' said Bambang Setiawan, director general of coal and mineral resources at Indonesia's Energy Ministry.
Bumi, a property developer till 2000, bought 80 percent of Arutmin from BHP Billiton in 2001 for $148.5 million and 20 percent from Bakrie Group for $37 million. Two years later, Bumi bought Kaltim Prima for $500 million from BP Plc and Rio Tinto Group, to become a coal mining company.
To contact the reporters on this story: Arijit Ghosh in Jakarta at aghosh@bloomberg.net; Naila Firdausi in Jakarta at nfirdausi@bloomberg.net
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