BNBR sells Rp 3.6t in securities to pay debt
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Publicly listed PT Bakrie & Brothers (BNBR), the flagship of the Bakrie family business empire, announced that securities amounting to Rp 3.6 trillion (US$378 million) were available for sale to help the company pare down its debts.
According to BNBR’s first-half financial report, the securities available for sale comprise shares in telecommunications company PT Bakrie Telecom totaling Rp 1.65 trillion; plantation company PT Bakrie Sumatera Plantation totaling Rp 659.75 billion; coal miner PT Bumi Resources totaling Rp 616.77 billion; oil and gas company PT Energi Mega Persada totaling Rp 465.09 billion; and developer PT Bakrieland Development totaling Rp 217.05 billion.
“We are an investment company. There is also a possibility that we will increase our ownership, instead,” BNBR’s finance director, Eddy Soeparno, said.
At the end of June, BNBR held a 2.64 percent stake in Bumi Resources, 7.04 percent in Bakrieland, 8.01 percent in Energi Mega and 28.89 percent in Bakrie Telecom.
BNBR has gradually sold off its ownership in Bakrie family-related businesses in recent years to manage its mounting debts. It now no longer consolidates listed subsidiaries, including the firms mentioned above.
According to its financial report for the year ending December 2011, BNBR used 170.48 million shares in Bakrie Sumatera to settle the former’s loans. For the year ending December 2010, BNBR used 2.08 billion shares in Bumi Resources, 734 million shares in Bakrie Sumatera, 6.22 billion shares in Energi Mega and 346.9 million shares in Bakrieland for the same purpose.
The first-half financial report also reveals that BNBR’s 550 million shares in Bumi Resources; 1.01 billion shares in Bakrieland; 3.21 billion shares in Energi Mega; 3.14 billion shares in Bakrie Sumatera; and 5.58 billion shares in Bakrie Telecom were used as collateral for BNBR’s short-term and long-term loans.
Selling its stakes in subsidiaries had benefited BNBR, leading to improved financial performance, the holding company’s data showed.
BNBR reaped Rp 11.38 trillion in revenue in the first half of the year, increasing by about 74 percent compared to Rp 6.53 trillion in the same period last year.
“The growth in revenue was primarily driven by Bakrie Energy International, whose contribution made up around 50 percent of the total revenue. Besides that, we also reaped income from selling our stake in Bumi Plc,” Eddy said.
Late last year, BNBR along with its Bakrie-related entity Long Haul Holdings, reached a deal to sell half of its 47.5 percent stake in London-listed Bumi Plc to PT Borneo Lumbung Energi & Metal for $1 billion or Rp 9.5 trillion. Eddy said that BNBR made approximately Rp 4 trillion from the deal and Long Haul Holdings obtained the remainder.
BNBR’s net profits stood at Rp 214.35 billion after the first half of the year, an almost fourfold surge from Rp 45.49 billion in the same period last year.
Eddy had previously said that BNBR was in talks with several interested companies about selling BNBR’s two subsidiaries. BNBR will use any funds raised from the sales to pay its debts.
According to its financial report, BNBR had total liabilities of Rp 10.02 trillion at the end of June, comprising Rp 7.07 trillion in current liabilities and Rp 2.96 trillion non-current, or long-term, liabilities.