Bakrie Life backed up by parent firm

Local insurance company Bakrie Life is targeting to settle ongoing disputes with its customers within the next 30 days using money raised by Bakrie and Brothers Group from the issuance of medium structured notes (MSN) earlier this year.

Bakrie Life president director Timor Soetanto said on Friday that Bakrie and Brothers Group (BNBR) had mobilized Rp 500 billion (US$51.5 million) to  help finance Bakrie Life so that it could settle these

BNBR owns Bakrie Life through its subsidiary, Bakrie Capital, which controls 91 percent of ownership in the insurance company, the remaining 9 percent being owned by the company’s  cooperative network.

“We will try to resolve the mismatch as soon as possible,” Timor said, adding that Bakrie Life hoped to be able to reach agreement with its customers on mechanisms and schedules to pay back funds owed to them since the end of October.

Timor said that the company had the responsibility to settle liabilities amounting to Rp 350 billion to 600 customers, whose investment funds could not be retrieved since late last year, following the late 2008 market crash.

The funds are invested in an investment product called Diamond Investa, in which 80 percent of the fund is linked to the performance of shares in the capital market. The product faced serious problem when the market tumbled in October 2008, when most shares dropped to their lowest point.