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Northstar to take 31% stake in Bakrie & Brothers
Northstar Pacific Partners, a subsidiary of US buyout company Texas Pacific Group may take control of about 31 percent of PT Bakrie & Brothers, the flagship of the politically wired Bakrie family, as part of a deal to help the company restructure debts and retain control of its main bread and butter earner — coal company PT Bumi Resources
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Northstar Pacific Partners, a subsidiary of US buyout company Texas Pacific Group may take
control of about 31 percent of PT Bakrie & Brothers, the flagship of the politically wired Bakrie family, as part of a deal to help the company restructure debts and retain control of its main bread and butter earner — coal company PT Bumi Resources.
Bakrie & Brothers will issue Rp 4.26 trillion (US$384 million) of bonds to Northstar that will be convertible into as many as 42.6 billion shares, equal to a 31 percent stake in Bakrie and Brothers, at a price of Rp 100 to Rp 110 a share.
Bakrie & Brothers spokesman Dileep Srivastava said the bonds, issued in May and to be converted into shares by the end of the year, will then replace a Rp 4.26 trillion loan the company owes to Northstar.
Northstar agreed in November to settle $575 million of Bakrie & Brothers’ debts to Odickson
Finance SA.
Northstar, founded by businessman Patrick Waluyo, will also hold a 30 percent stake in a joint venture with Bakrie & Brothers in order to secure 21.4 percent of Bumi.
Bumi contributes some 88 percent of Bakrie & Brothers’ total annual profits, with sales last year of $2.26 billion and net profits of $789 million, Shares in Bakrie & Brothers were unchanged at Rp 50, while those of Bumi continued to slump to Rp 470 from Rp 520, its lowest in four years, on Wednesday’s trading.
Bakrie has been striking deals with other investors, including on sales of stakes in its subsidiaries, to help pay its $1.2 billion debts after shares in Bumi and other Bakrie Group firms, pledged as collateral, slumped during the October stock market collapse. These debts are backed by stakes in some of its subsidiaries.
Shares of the units, which had been put up as debt collateral, dropped significantly due a
combination of the global financial crisis and concerns the group might be unable to repay its debts. Bumi alone has tumbled 74 percent over the last three months, according to Bloomberg.
