T

he Indonesia Stock Exchange (IDX) suspended on Tuesday the trading of CDMA-based telecommunications provider PT Bakrie Telecom’s shares and bonds amid speculation over the company’s failure to pay its debts.

“Trading of the company’s shares and bonds will continue to be suspended until further explanation,” the bourse said in a statement.

The IDX said that the suspension was imposed after it received a letter from the Indonesian Central Securities Depository (KSEI) stating that Bakrie Telecom (BTEL) delayed the payment of the principal and the interest of the bonds it issued in 2007, worth Rp 650 billion (US$68.4 million), which matured on Tuesday.

KSEI said that BTEL was required to transfer the funds on Monday, a day before the maturity date. Failure to meet the requirement, according to KSEI, will lead to delays in money transfers to bondholders’ accounts.

Last Sunday, BTEL said that it had raised Rp 557 billion from its non-preemptive rights issue, which would be used to partly fund the bond’s payment. BTEL’s affiliated company Bakrie Global Venture purchased the shares the telecommunication company offered during the rights issue.

In July, Credit Suisse’s Singapore branch arranged a $50 million syndicated loan to BTEL at an interest rate of 11.5 percent and with an 18-month maturity period. The loan will also be used to pay the maturing bond.

The company said that it had paid Rp 250 billion of the principal debt and Rp 19.3 billion in interest payments to KSEI on Friday. The remaining Rp 400 billion, BTEL stated, would be paid one day before the due date.

“However, due to a holiday [Labor Day] in New York on Monday, the creditor was not able to do the transaction. The payment will be made on Tuesday,” BTEL said in a written statement.

The postponement of the bond’s repayment was not because of a default situation, BTEL president director Anindya Bakrie said.

“We regret the speculation [of default] made by some parties. BTEL management is fully committed to meeting the company’s obligations on the agreed schedule,” Anindya said.

According to its financial report of the first semester of the year, BTEL’s short-term liabilities amounted to Rp 3.21 trillion while long-term liabilities stood at Rp 4.67 trillion.

The company reported poor performance in the first half of the year with net losses jumping to Rp 749.66 billion from Rp 179.69 billion in the same period last year.

The CDMA-based mobile phone operator’s rumored debt default is the latest in a series of bad news for companies under the Bakrie Group, which is controlled by Golkar Party chairman and presidential hopeful Aburizal Bakrie. Bumi Resources, Indonesia’s largest coal producer, suffered a sharp drop in its share price after reporting a net loss of $322.1 million for the first half of this year. The news also ripple effects that negatively affected the share prices of the group’s other listed subsidiaries.