Shares in Bakrie firms dive after lifting of suspension

Ika Krismantari ,  The Jakarta Post ,  Jakarta   |  Wed, 11/19/2008 11:02 AM  |  Headlines

Fueled primarily by negative sentiment over the lack of transparency in its debt-related problems, shares in the Bakrie Group of companies plunged on Tuesday, with analysts seeing no end in sight to the group's debt saga.

The Indonesia Stock Exchange (IDX) lifted a trading suspension Tuesday in shares of investment company PT Bakrie & Brothers -- the flagship of the influential Bakrie family -- and energy company PT Energi Mega Persada.

An immediate 9.66 percent drop in Bakrie & Brothers shares to Rp 131 and a 10 percent fall in Energi Mega to Rp 315 triggered the IDX's automatic suspension mechanism. The shares had been suspended since Oct. 7.

HD Capital head of research Adrian Rusmana said such a performance was an indication investors remained suspicious about the company, with so many questions related to its financial status and debt situation still unanswered.

"It hasn't made clear the aim of the proceeds raised from the repo and from the rights issue it made early this year," Adrian said.

A repo, or repurchase agreement, is a borrowing mechanism in which securities are put up as collateral for a loan. This forced Bakrie into severe difficulty after the global market rout cut the value of its collateral, forcing the group to either top up the value, accelerate debt repayments, or risk the collateral being seized.

Adrian said the negative market reaction was also due to the possibility the Bakrie deal with Northstar Pacific to sell its 35 percent stake in Bumi Resources for $1.3 billion could fall apart because of Bumi's declining share price.

Bumi shares plummeted by 9.5 percent to Rp 950.

Bakrie needs to sell stakes in Bumi and other companies to raise funds to service its debts.

Meanwhile, IDX listing director Eddy Sugito said the regulator was not satisfied with Monday's disclosure by Bakrie & Brothers, saying much key information remained undelivered.

"We are not satisfied with the disclosure because there are details that we expected the company to disclose," Eddy said, refusing to elaborate on those details. (hwa)

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