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eveloper Bakrieland Development (ELTY) is in talks with Sentul City (BKSL) about a plan to sell its remaining stake in Bukit Jonggol Asri to the listed property firm.

The funds from the sale are said to be used to settle debts.

Bakrieland, through its subsidiary, sold a 15 percent stake in Bukit Jonggol to Sentul City for Rp 300 billion last April.

Following the deal, Bakrieland'€™s ownership in Bukit Jonggol decreased to 35 percent from a previous level of 50 percent. Meanwhile, Sentul City'€™s shareholding increased to 65 percent from 50 percent.

Bakrieland president director Ambono Janurianto said his company would sell the remaining 35 percent stake to the partner. '€œThe process is a bit delayed, however, we will surely divest it,'€ Ambono said on Monday.

Sentul City vice president Andrian Budi Utama admitted the talks were ongoing. '€œThe scheme is not final. We are still in negotiations,'€ Andrian said over the telephone.

Ambono said Bakrieland sought cash and a chunk of land for payment of the divestment of its 35 percent stake in Bukit Jonggol Asri.

According to Bakrieland'€™s March financial report, Bukit Jonggol currently has 12,907-hectares of land, which remain undeveloped, in Jonggol district, Bogor regency, West Java.

Ambono said his company had planned to use the land as a guarantee and settlement of its equity linked bonds amounting to US$155 million.

Bakrieland is facing a legal appeal of the equity linked bonds. Its creditors have submitted a debt postponement petition (PKPU) to the Central Jakarta Commercial Court due to Bakrieland'€™s failure to meet its obligations to pay the $155 million bonds.

The PKPU remains in process and the court is expected to give an order on whether it accepts or rejects the PKPU appeal.

After a court rules in favor of a PKPU, a company will have to propose a debt settlement to all of its creditors. If the company fails to obtain creditors'€™ approval for the debt settlement proposal, the court will declare the company bankrupt.

Bakrieland'€™s linked bonds, which bear an 8.625 percent interest rate, were supposed to mature in March 2015. However, on March 20 bondholders exercised an option to mature the bonds.

The company claims its finance cannot support the immediate payment of the bonds and has proposed a restructuring.

Ambono revealed that prior to the PKPU appeal, Bakrieland had offered a proposal to creditors stating it would pay $31 million in cash within 60 days after the signing of new agreement over the equity linked bonds, an increased interest rate, an extended maturity period to 2016 and to change the bonds'€™ from unsecured to secured debts. Unsecured creditors have less protection when debtors are in bankruptcy.

According to Ambono, the assets acting as the guarantee for the equity linked bonds could be a 600-hectare piece of land in Sentul or 500 hectares in Bogor, both in West Java.

'€œThey already know the plan, they have visited the location. However, they said they need cash,'€ Ambono said.

In a recent emailed statement, a representative of the bondholders said they '€œhave always been happy to figure out a mutually acceptable solution with Bakrieland.'€