JAKARTA: Investors massively sold PT Borneo Lumbung Energi & Metal Tbk's shares in the market, on its announcement to acquire 23.8% stakes of Bumi Plc from Bakrie Group, worth to US$1 billion.
Borneo is the biggest listed coking coal miner in Indonesia, controlled by the former Deloitte & Douche auditor Samin Tan. The transaction value equals to IDR8.87 trillion.
The investors is said to negatively react the acquisition, as it is executed at the exercise price of 10.91 poundsterling, 48.44% more expensive than yesterday’s Bumi plc's stock price of 7.35 pound sterling.
The BORN-coded stock slumped 15.53% to IDR870 per share in Jakarta trading yesterday, translating 14.26 times price to earnings ratio. PT Bumi Resources Tbk dropped 8.51% to IDR2,150 per share.
The fund to acquire Bumi Plc is derived from 5 years-tenor loan provided by Standard Chartered. This debt is pledged by 99% stakes of Borneo’s subsidiaries, PT Asmin Koalindo Tuhup and PT Borneo Mining Services.
Samin pays too much for Bumi Plc, said analyst at MNC Securities Edwin Sebayang, while the prospect of this company is not relatively good with high debt to equity ratio (DER).
“The acquisition price is 46% higher than October’s stock price. I am not surprised that Borneo's stock price slumps. Investors must also notice whether the dividend from Bumi Plc is equal to the interest of Borneo’s debt to Standard Chartered Bank,” he said.
Edwin worried this acquisition will somehow destabilize Borneo, adding that he recommend the investor to wait for the BORN price to be below IDR860 level, before collecting them.
Credit Suisse
Bakrie Group will use the entire divestment proceeds to settle its debt to creditor consortium led by Singapore’s Credit Suisse AG. Its total debt to Credit Suisse is US$1.34 billion, maturing early 2012.
The earlier the debt settled, the better it will be for PT Bakrie & Brothers Tbk as the debt was pledged by Bumi Plc’s stakes at 8.50 pound sterling. Bumi Plc was down 0.68% to 7.35 pound sterling.
Bakrie Group is still negotiating the settlement of the remaining US$300 million debt with Credit Suisse, and expected to finish it at the very least by December this year.
Last year, Bumi Plc is declared as one of Bakrie Group's international achievement as the London-listed company is a joint venture with Nathaniel Rothschild, the successor of Rothschild clan. (03/t02/ags)
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