Don't blink on The Three!

Three related firms of Bakrie Group, PT Bakrie Telecom Tbk, PT Energi Mega Persada Tbk, and PT Bakrie Sumatera Plantations Tbk, are having first half financial audit.

My source told me yesterday that the three of Bakries Seventh were hammering out corporate actions related to their shares. "This is a right moment for the three to spark corporate actions after shares price bounce back."

So, keep an eye tightly to their public announcements submitted in the coming weeks. It perhaps providing you alot of gains.

Summarecon targets 15% revenue growth

PT Summarecon Agung Tbk (SMRA), a property company curbing mostly land bank at Kelapa Gading, Northern Jakarta, has set a target of 15% revenue growth this year, in line with macro economy bounce back which spurs property sector.

"We have targetted a 15% revenue growth by the end of this year. If the economy continued to grow, our company would gain revenue from property sales," Johanes Marzuki, President Director of Summarecon, told Inilah.Com on Saturday. The biggest contributor for Summarecon revenue, he said, remains property sales at Kelapa Gading and Serpon, while tenants growth at Mal Kelapa Gading keeps growing.

Trust Resources swallows Itamaraya

PT Itamaraya Tbk, previously gold retailer company, is swallowed by a Singapore-based firm Trust Energy Resources Pte Ltd.

According to Itamaraya's public statement to Indonesia Stock Exchange today, Trust Resources acquired 94.61% of Itamaraya shares or 32.17 million shares. The buyout has made Trust Resources a new controlling share holder at Itamaraya.

Before Trust Resources enrolled Itamaraya, previous contolling shareholders were Indra Tamtomo and Herman Tamtomo. Both owned around 85.9%, while state-owned PT Taspen holds 10.19%.

Tin price drop batters Timah profit

A sharp drop of tin price during the first half this year has significantly battered net profit of state-owned tin maker PT Timah Tbk.

In a public statement to Indonesia Stock Exchange late this afternoon today, Timah first half profit tumbled by 96.14% from Rp1,111.8 trillion to merely Rp42.9 billion. Its operating profit dipped by89.32% from Rp1,672 trillion to Rp178.6 billion, while the company's sales shrunk by 15.7% from Rp4.20 trillion to Rp3.54 trillion.

The company was also beset by 38.30% tumble of tin price average from US$19,591 per metric tonnes (MT) to US$12,087 per MT. In contrast, its first half refined tin sales elevated by 15% from 20.954 MT to 24,110 MT. Timah tin production downed from 22,992 MT to 19,378 MT in the first half this year.

DOID to refinance BUMA debt

PT Delta Dunia Property Tbk (DOID), a shell company majority controlled by PT Texta Indonesia, has to refinance US$310 million debt of coal mining contractor PT Bukit Makmur Mandiri Utama (BUMA), acquisition target of DOID.

In a public announcement today, DOID will buyout 99% of BUMA shares valued of US$239.99 million, while in total, the buyout of both BUMA equity and debt is US$550 million. DOID will seek bank loan or another financing source of US$550 million.

Pursuant to conditional share sale and purchase agreement signed on August 19 2009 between two buyers, DOID and Edy Suwarno, and two sellers, PT Bukitmakmur Widya (BMW) and BUMA founder Johan Lensa.

BMW is scheduled to sell 1,947,500 of BUMA shares to DOID, and then Johan Lensa will divest 102,499 shares to DOID, while he is going to offload one share to Edy Suwarno as well.

In return, DOID will provide US$228 million to BWM and US$11.99 million to Johan Lensa, while Edy Suwarno is going to pay US$117 to Johan Lensa as well.

Buyers will transfer US$239.99 million to sellers when the transactions could be closed at least on October 8 or the latest on October 31.

Bristol-Myers profit soars by 64.02%

A pharmacy company PT Bristol-Myers Squibb Indonesia Tbk posted a steep jump in net profit by 64.02% in the first six months this year compared to the same period last year.

The company booked net profit of Rp75.09 billion in the first half 2009, while Rp45.78 billion in the same period last year.Bristol-Myers, which is now is for sale, made 28.06% soaring in net revenue from Rp172.48 billion in the first half last year to Rp220.89 billion.

In line with the higher revenue, operating profit of the company remains intact by posting a 59.84% jump from Rp66.98 billion to Rp107.06 billion. Cash and cash equivalent of the company ended June 2009 skyrocketed by 204.31% from merely Rp31.31 billion to Rp92.28 billion.
Holding company of Bristol is offering Bristol-Myers Indonesia to investor. One of the companies interested to buy Bristol-Myers is PT Kalbe Farma Tbk.

In a public statement provided by Bristol-Myers to Indonesia Stock Exchange on September 24, the company said its holding is underway to transform business into biopharmacy-based. In doing so, the holding renews all arm firms entire the world. Around 98% of Bristol-Myers Indonesia shares are controlled by 345 Park Corporation, while the rest remains public.

Antam looks at BHP coal

State-run nickel producer PT Aneka Tambang Tbk (Antam) is eyeing some coal mining companies owned by BHP Billiton Ltd.

Alwin Syah Loebis, President Director of Antam, said the company is awaiting proposal from BHP related to the acquisition plan.

In June, BHP Billiton said it would not go ahead with the Haju trial coal mine in Central Kalimantan because it did not fit with its long-term investment strategy.

Haju is stage one of the Maruwai coal project, wholy steered by BHP Billitont, in Central Kalimantan which is expected to produce 1 million tonnes of metallurgical coal for steel-making -annualy. Some companies have shown interest in buying BHP Billiton's coal project like Indonesian private equity fund Saratoga Capital.

Vale Inco offloads 2.07% shares

Vale Inco Ltd, controlling share holder of nickel producer PT International Nickel Indonesia Tbk (Inco), has offloaded 2,07% its ownership at Inco worth Rp925.56 billion.

Vale, helped by PT UBS Securities Indonesia, has sold its shares via crossing market at Indonesia Stock Market at Rp4.500 per share. After the sale, Vale remains Inco controlling owner of 58.73%, while the remainings are held by Sumitomo Metal Mining Co Ltd of 20.09%, and public of 21.18%.

Mobile-8 to issue new shares

A CDMA-based technology operator PT Mobile-8 Telecom Tbk is hammering out to issue new shares without subscription rights of around Rp500 billion.

As reported by Detik.Com late this afternoon today, issuing new shares is an alternative scheme to restructure Mobile-8 debts, dubbed debt to equity swap.

"We have prepared to issue new shares without subscription rights," said Corporate Secretary Mobile-8 Chris Taufik. The company will offer the new shares to some creditors. According to the company public statement to Indonesia Stock Exchange, Mobile-8 has scheduled an extraordinary general meeting on September 30 to ask permission from creditors to issue new shares The operator has deluged debt of Rp2.87 trillion during the first half this year.

First Resources to unveil US$100 million CB

A parent company of Indonesia-based oil plantation firm PT Ciliandra Perkasa, First Resources Limited has proposed to unveil convertible bond (CB) of US$100 million.

Coinciding with the debt launching, a rating agency Fitch Ratings has today affirned Ciliandra long term foreign and local currency issuer default ratings of BB- and its national long term rating of A+. Outlook on the ratings remains stable.

Ciliandra Perkasa Finance Company Pte Ltd has senior unsecured notes of US$140.2 million due in 2011, guaranteed by Ciliandra and its subsidiaries.

Fitch has affirmed Ciliandra's ratings as it believes that the issuance of the CB will not materially change First Resources' and Ciliandra's credit profiles, which are linked due to First Resources 95.5% ownership and control of Ciliandra.
First Resources will utilize CB proceeds to develop plantations in West Kalimantan that are not owned by Ciliandra. First Resources current capex guidance of up to US$25 million annually(excluding capex of Ciliandra and its subsidiaries) over the medium term is unchanged from its earlier indications. Fitch also notes that the CB will not deteriorate the position of Ciliandra's existing bondholders.

Sentul City converts Rp81.2 billion debts

A property company PT Sentul City Tbk has determined to convert Rp81.2 billion of debts into shares.

The debts were previously provided by PT Citra Karisma Komunika, Des Voeux Group Limited, and Cyber Ready Consultant Ltd. Debt conversion, at Rp160 per share, will allow all creditors to seize 507.51 million of Sentul shares.

Along with the debt restructuring, Sentul is scheduled to hold an extraordinay general meeting on September 8 2009. After conversion, previous share holders will be deluted by 5.07%.

Bakrie Telecom profit skyrockets?

Esia provider PT Bakrie Telecom Tbk during the first six months this year reported a steep jump of net profit compared to the same period last year. "Bakrie Telecom net profit leaps during the first half 2009 compared to the first six months last year, while we don't have any intention to revise down subscribers target this year of 10.5 million," said Director Bakrie Telecom Jastiro Abi as reported by Bisnis Indonesia daily today.

In the first half last year, the operator made a steep soaring in net profit by 59.5% to Rp62.40 billion in comparison with the same period previous year of Rp39.10 billion. "By the end of this week, we will announce the first half audited report," he said.

Bakrie to win Newmont battle?

Bakrie Group eventually wins the battle to grab 14% shares of gold mining company PT Newmont Nusa Tenggara, battering the central government whose Finance Minister Sri Mulyani Indrawati is in charge to that matter.
As reported by Kontan daily newspaper today, the central government has reached an agreement with local governments to set up a consortium with PT Multi Daerah Bersaing.

The central government allows them to bid Newmont. "The cooperation between Bakrie Group and local governments remains intact," Kontan sources said.

Multi Daerah had been formed by three local governments in Nusa Tenggara Barat and PT Multicapital, an investment arm of Bakrie Group, a wholy owned conglomeration by Bakrie family.

The local governments holds 25% of Multi Daerah, while the remaining majority belongs to Multicapital. But, Sri Mulyani asked the consortium to allow state-owned nickel producer PT Aneka Tambang Tbk to join.

BMRI to make debut in IDR bond market

The biggest bank in Indonesia PT Bank Mandiri Tbk is striving to test the water. Yesterday, the bank invited 7 strong candidate of underwriters to help unveiling of both rupiah and US dolar notes.

According to a source familiar to that matter, the underwriters candidate, at 2.00 PM yesterday, made a frenzy talk with Bank Mandiri management to know what the bank's need in subordinated loan.

The strong candidates are Bahana Securities, Barclays Capital, Danareksa Sekuritas, Deutsche Bank AG, Standard Chartered Securities, and Trimegah Securities, while Bank Mandiri's brokerage unit, Mandiri Sekuritas, becomes the first underwriter.

"The IDR and dolar AS subdebts in tandem will be launched by Bank Mandiri. Rupiah bond will be in vanguard with an offloading tentative schedule late this year, while US dolar notes in the first quarter next tear " the source said.

Bank Mandiri is seeking around Rp3 trillion, but below Rp5 trillion to fulfill demand for second tier capital. If the bank makes it good with IDR bond, it will be a sparkling record.

Concurrently, upcoming Bank Mandiri's subdebts will find the fiercest contender such as second tier notes of PT Bank Rakyat Indonesia Tbk, PT Bank Pan Indonesia Tbk, and PT Bank Tabungan Pensiunan Nasional.

Petrosea seals US$200 million contract

PT Petrosea Tbk, a subsidiary of PT Indika Energy Tbk, has signed a new 60 months mining contract worth an estimated US$200 million at Sanga Sanga, East Kalimantan.

The new contract with PT Adimitra Baratama Nusantara is set to initiate in August this year with work covering to load and haul 14 million tonnes of coal and 126 million bank cubic meter of overburden materials over the next five years.

Micky Hehuwat, President Director of Petrosea, said sealing the long term mining contract builds on a very solid base for the company’s mining operations over the next five years and continues Petrosea’s success in expanding its contract mining operation.

The contract agreement will see Petrosea commitment to invest of US$44 million in new plant over the next five years as well as utilizing plant and equipment coming free from other operations.

Saptaindra IPO simmers

For PT Saptaindra Sejati, a coal mining contractor, a desire to enroll stock market is always lingering. But, when the time of IPO unveiling is nigh, it always a stumbling block to halt the process.
After its holding firm, PT Adaro Energy Tbk, made a debut in the capital market mid last year, Saptainda would follow its predecessor. But, a collapsed market hammered by global financial crisis wave delayed the company IPO.

Last week, I heard a market info that a kick-off meeting to revive Saptaindra IPO was held. PT Danareksa Sekuritas led the meeting, while no one Saptaindra executives could be reached for comment.

If Saptaindra sticks with its plan, 20% of IPO should be in the range of US$100 million-US$150 million. But, the question is how Saptaindra can lure investor while it posted Rp460.48 billion in net loss last year?

In the coal mining contractor industry, Saptaindra is smaller that its competitors such as PT Pamapersada Nusantara, the biggest player in the industry with a total market share of 41%-42%.

In term of revenue, Pama, subsidiary of heavy equipment Komatsu distributor PT United Tractors Tbk, ranks the top. Last year, Pama booked Rp15.50 trillion revenue, while PT Bukit Makmur Mandiri Utama previously controlled by Johan Lensa family posted Rp6.92 trillion.

PT Darma Henwa Tbk, coal contractor for KPC, made Rp2.13 trillion revenue, while PT Petrosea Tbk, a unit firm of PT Indika Energy Tbk, and Saptaindra secured a consecutive revenue of Rp1.99 trillion and Rp1.86 trillion last year.

ITMG provides US$260 million to buy coal

PT Indo Tambangraya Megah Tbk (ITMG) has prepared an unflagging cash of US$260 million to acquire coal mining. A subsidiary of Thai coal producer Banpu Plc is relying on its internally-generated cash to support expansion.

ITMG Finance Director Edward Manurung, as reported by Kontan daily today, said the company so far has no intention to drawdown bank loan. "But, if we need it, ITMG will aproach banks," he said.

ITMG is one of PT Berau Coal, fifth biggest coal mining in Indonesia, bidders evolving a due diligence until August 28 before coming with a binding bid on September 3. ITMG is in fierce price battle involving four others to grab Berau.

PT Indika Tbk has teamed up with a private equity fund firm, while Quattro Capital, a SPV of Surabayan Kentjana Widjaja, allows Daisang, South Korea to set up a consortium. So far, PT Medco Energi Internasional Tbk and PT Recapital Advisors are very quite.

A market rumour said Medco has offered Berau Coal to hold a backdoor listing. A source said Medco strives to emulate the other bidders to seal syndicated financing. "I hear Medco is asking help to Sumitomo to arrange of US$350 million loan, while Indika with its advisor Citi has tapped door of some banks to curb debt."

Bumi & Herald battle lingers

It seems a second price war between management PT Bumi Resources Tbk, a main booster of PT Bakrie & Brothers Tbk net profit, and an Australian mining firm Herald Resources Ltd will revive soon.

A day after Bumi proposing to takeover the remaining 15.8% of Herald shares at AUS$0.7 per share, management Herald has advised its share holders to take no action over the offering. Bumi, using a special purpose vehicle dubbed Calipso Investment Pte Ltd, a wholly-owned subsidiary, currently steers 84.2% of Herald's issued shares.

Calipso said it considers the likelihood of a competing bidder for Herald emerging to be remote. Bumi management said on Friday that the offer price represented a substantial premium to Herald's recent trading levels.

Independent Director of Herald Andrew Wilson, as reported by AAP News on Sunday, described the offer as opportunistic and unsolicited and said it came as a surprise to the independent directors.

"We urge shareholders to take no action until the offer is reviewed in detail by the independent directors over the next few weeks," he said in a statement.
"The independent directors will evaluate this offer and the underlying value of the Dairi project, the company and its cash flows, from the perspective of the best interests of all shareholders.

Although the offer is a premium to the traded price for the last six months, it is only a quarter of Bumi takeover price in July last year.

"Considering the significant changes to the economic landscape since Bumi acquired its majority stake for AUS$2.85 per share, the board will evaluate whether this offer is reasonable for the minority shareholders in Herald." Herald shares closed on Friday up 15 cents at 55 cents.

Eddy S. & Palm Capital sell IndoAgri

Two substantial share holders of Indofood Agri Resources Ltd (IndoAgri), publicly listed CPO producer in Singapore Stock Exchange (SGX), have sold their shares.

IndoAgri is a subsidiary company of the biggest noodle maker in Indonesia PT Indofood Sukses Makmur Tbk steered by Salim family using First Pacific Company Ltd.

In a public announcement submitted by IndoAgri to the SGX, Eddy Sariaatmadja, previously held 6.82% of shares, has offloaded its ownership of 0.89% to the market. The divestment sliced his shares to 5.97%.

Coinciding with Sariaatmadja, the other share holder Palm Capital Pte Ltd has sold 0.85% from 6.82% to 5.97% to the market.

For the financial result ended on June 30 2009, IndoAgri posted a sharp drop of revenue by 30% to Rp4.28 trillion compared to the same period of Rp6.12 trillion. Along with a significant slashing, IndoAgri operating profit downed 24.6% from Rp2.57 trillion to Rp1.94 trillion in the first half 2009. Profit after tax sank 21.9% from Rp1.64 trillion to Rp1.28 trillion.

Bumi is back for Herald

The most darling coal producer for Bakrie family, PT Bumi Resources Tbk, is secondly hammering out an unflinching strategy to decoy the remaining share holders of an Australian metal producer Herald Resources Ltd.

In a public statement to Indonesia Stock Exchange late afternoon today, Bumi, the biggest coal miner in Indonesia, using its special purpose arm dubbed Calipso Investment Pte Ltd, has provided an offering to buy 15.8% shares of Herald at AUS$0.7 per share or AUS$10 million-AUS$15 million in total.

Calipso, reaping an ownership of 84.2%, is the only controlling share holder of Herald. Bumi subsidiary seized a Herald majority shares after rending the offering price submitted by its fiercest contender, a state-owned nickel producer PT Aneka Tambang Tbk (Antam), in lingering battle in 2008.

During the competition, Antam with its subsidiary Tango Mining and Zhingjin Lingnan Nonfernet, China, in tandem vigorously biguiled Calipso. Antam suddently ceased its path from the battle when deadline was nigh. Thanks to Antam new management. Soon after Antam scrapping its deal, financial global crisis devastated all metals price, making Calipso investmet so expensive. The company needs more cash to monetize Herald fields in Dairi, Sumatra as well.

Herald share holders who are interested to offload their shares, they can grab one month offering.

Agis to divest JCL Indonesia

PT Agis Tbk (TMPI) is fastening offloading of 51,31% shares in its subsidiary unit PT JCL Indonesia to PT Madari Eka Pratama.

As reported by Vivanews today, Agis Corporate SecretaryPoernomo Adjie in a public announment to Indonesia Stock Exchange, said the sale is in line with JCL share holder, JCL Centrum Austria, which has changed its operation and business coverage. Agis steers 51,31% in JCL Indonesia, while the remaining owned by JCL Centrum. JCL Indonesia has main business in forwarding and logistics.

Delta Dunia grabs Buma, rights issue?

When I heard a market rumour that PT Delta Dunia Property Tbk (DOID) is eager to acquire the second largest of coal mining contractor PT Bukit Makmur Mandiri Utama (Buma), I thought it was ridiculous.

How come a shell firm like Delta Dunia plans to seize Buma, the company controlled by Johan Lensa family with revenue of US$693 million and EBITDA US$250 million last year?

The answer is Northstar Pacific Partners with its fully underpinned by a giant private equity fund Texas Pacific Group (TPG). Some said Hendrik Tee, ex Sinar Mas Group and Truba Alam Manunggal, is a man behind the scheme.

Delta Dunia has a market capitalization of Rp11.47 trillion. In contrast, the company merely booked tiny revenue of Rp660 million and Rp2.33 billion net profit during the first half/2009. Based on company press release today, Delta Dunia has entered a conditional share sale purchase agreement with Buma share holder to acquire the coal contractor of US$550 million. The buyout is schedulled to close by the end of this year, while Barclays Capital helps Delta Dunia to arrange the financing as well.

Is it cheap or expensive?

For Delta Dunia, the buyout should be very expensive as it doesn't have a robust cash flow to support the transaction. A feasible financing is leveraged buyout (LBO) or issuing new shares.

If it is LBO, Delta Dunia needs more than just assets to seal mortgaging loan. Who is behind Delta with bankable name? By getting a fully support from Northstar and TPG, financing will be ease for the company.

How about rights issue? This is another affordable option to secure financing, while Northstar could set a stanby buyer. In result, Northstar could steer Delta at least 51% and the rest remains public.

Assuming Buma EBITDA is US$250 million, it means Delta Dunia pays 2.2x price to EBITDA. In comparison, a peer of Buma, PT Pamapersada Nusantara, the biggest coal contractor whole owned by PT United Tractors Tbk, has price to EBITDA of 4.47x. It is a discount price.

Delta Dunia, previously PT Daeyu Orchid Tbk, is controlled by PT Texta Indonesia of 46% shares and Benny Wirawansa 13%. He is a close friend of Tjokrosaputro. Benny owns 19.69% shares in PT Bumi Teknokultura Unggul Tbk controlled by Tjokrosaputro family.

Delta Dunia has listed shares in Indonesia Stock Exchange in 2001. The company held six folds rights issue and issued mandatory convertible bonds twice.

Pondering Barito rights issue

Forbes magazine put Prajogo Pangestu, controlling share holder of PT Barito Pacific Tbk, in the 20th rank of the richest Indonesian conglomerates with total wealth of US$220 million.

A sharp dippening of Barito shares price was the culprit for the shrinking of his wealth in 2008 compared to the previous year.

But, his fortune this year seems getting sturdy. This is due to a shiny operating performance of Prajogo's most darling holding firm, Barito. Up to now, the company, a holding firm for PT Chandra Asri and PT Tri Polyta Indonesia Tbk, hasn't submitted first half result as needs limited review.

Head of Investor Relations Barito Agustino Sudjono said the company second quarter result will skyrocket, beating analysts estimation. In comparison, Barito first half result this year is gauged two folds higher than the same period last year.

According to him, the company last quarterly report surpassed the previous quarter as growing demand run frenzy after financial crisis abating. In fact, oil price uptrend currently has proped up Barito performance as well. With a hefty oil price, the company is comfortable to jack-up selling price of plastic materials.

At a glance, Barito booked Rp211.20 billion sales and net profit of Rp37.03 billion during the first half in 2007. A year latter, the company posted revenue of Rp8.53 trillion with soaring net loss of Rp372.70 billion.

The biggest contributor of Barito huge net loss was goodwill, spread between acquisition and market price, carried from Chandra Asri.

Analyst Liny Halim from PT UOB Kay Hian Securities in her report published few days ago said Barito EBITDA is calculated to rise, underpinned by Chandra Asri and Tri Polyta earnings power. Barito net profit is calculated Rp500 billion during the first half this year.

She estimated its earning could enlarge to Rp1.1 trillion, reflecting an estimated P/E ratio of 9.5 times. The most lucrative thing is Barito shares price remains undervalued and traded at P/E of 0.5 times, sharp below her estimation.

How about Star Energy story?

Liny explained Star Energy is the most precious jewel for Prajogo family. Valuable assets of Star Energy are Kakap oil field and operations at the biggest geothermal power station in Indonesia. Barito so far steers 40% of Star Energy, while the remaining owned by Ashmore and stellar stock market player Agus Projosasmito via PT Nusantara Capital consecutively of 30%.

In order to prop up Star Energy buyout, Barito needs an affordable rights issue, replicating the previous technique when it injected Chandra Asri. Rights issue price was determined at Rp2.100 per share.

Pursuant to the level, she said, upcoming rights issue will be held late this year at the price higher than Rp2.100. It is important for Prajogo to realize rights issue price above Rp2.100 to flee from losing money.

A source said using the assumption, it means Barito shares price remains open for potential upside, while the company is traded at Rp1.460 per share. Market players absolutely hope that Barito price is higher than Rp2.100 to lure investor subscribe their rights. (Bisnis Indonesia, August 20, page F3)

Dayamitra reaps Solusindo

PT Dayamitra Telekomunikasi, a subsidiary of giant state-owned telecommunication operator PT Telekomunikasi Indonesia Tbk, has enrolled a conditional share sale and purchase agreement with PT Solusindo Kreasi Pratama.

Dayamitra has agreed to acquire up to 80% of Solusindo, tower provider with more than 800 towers across Indonesia. It has over 1,400 tenants with earning around Rp300 billion.

In general, Solusindo could bolster a growth engine of Telkom. Telkom shares price has been lagging compared to Indonesia composite index, the second best performance globally.

Indosat secures export credit US$315 million

Second largest cellular operator PT Indosat Tbk has sealed a credit export of US$315 million from Export Kredit Namnden (EKN).
The operator, signed loan agreement with EKN on August 18, will utilize the loan to hammer out procurement of telecommunication equipments from Ericsson, as one of major supplier for Indosat. The operator has designated Hongkong and Shanghai Banking Corporation and The Royal Bank of Scotland to arrange credit facility.

Delta Petroindo eyes 3 coal contractors

PT Delta Dunia Petroindo Tbk is eyeing three coal mining contractors in Sumatra, Kalimantan, and Sulawesi. The company is hunger for buying them of around US$500 million.

"The plan has initiated since last year. Nowadays, we are still negotiating," said Ricardo Suhendra Wirjawan, Director Delta Dunia, as reported by Detik.Com today.

But, he declined to mention three targetted firms. "I can't disclose their names due to confidentiality agreement," he said.

Acoording to my source, Delta Dunia has strived to inject PT Bukit Makmur Mandiri Utama (Buma). Delta shares price in June 1 stayed at Rp510 per share. The share was closed 8.33% jump to Rp1.690, traded at P/E 6,760 x.

Indosat net profit skids by 4.6%

A cellular operator subsidiary of Qatar Telecom Q.S.C., PT Indosat Tbk, is engulfed by a net profit drop by 4.6% in the first half this year compared to the same period last year.

Indosat public announcement to the Indonesia Stock Exchange this morning revealed that the operator recorded net profit of Rp1.007 trillion in the fiscal year ended June 30 compared to Rp1.055 trillion during the first half last year.

In contrast, the company's revenue slightly elevated by 1% from Rp8.834 trillion to Rp8.919 trillion in the first half this year. But, EBITDA slashed by 1.8% from Rp4.413 trillion to Rp4.335 trillion.

Watchout Delta Petroindo!

Today, I hear a rumour that a coal company will be injected into PT Delta Dunia Petroindo Tbk as. But so far, no one from the company is available for comment. Shares price of Delta closed 4% higher than yesterday to Rp1.560 per share.

Indika to seal syndicated loan?

PT Indika Energy Tbk, a holding company of coal producer PT Kideco Jaya Agung, is striving to seal a syndicated loan of nearly US$400 million.

A source familiar to that matter said with a help of its financial advisor, Citi, Indika launched the sydication last week. "It seems the loan will be useful for PT Berau Coal to buyback its fiva year notes," he said late last week.

Berau unveiled five year US dolar dominated bond of US$325 million in December 2006, arranged by Merrill Lynch. Nowadays, the debt has shrunk to around US$294 million.

Based on debt identure between Berau and bond holders, if there were changed in controlling Berau, the company should buyback its debt. So, when new buyers acquire up to 90% of Berau, the coal producer has to early redeem its bond.

Matahari posts operating profit plunge

PT Matahari Putra Prima Tbk, a retailer steered by Lippo Group, has recorded a plunge on its operating profit in the first half of this year. Pursuant to Matahari's second quarter result failing to the Indonesia Stock Exchange in late Friday last week, the retailer's operating profit dipped by 53.98% to Rp60.42 billion in the first half of 2009 (yoy) from Rp131.29 billion.
But, the bottom line of the company recorded a 117.12% jump compared to the same period last year of Rp60.04 billion. Revenue during the first half this year rose 15.44% from Rp5.18 trillion to Rp5.98 trillion.

Kalbe weighs M&A, Bristol-Myers buyout?

A giant integrated pharmacy firm PT Kalbe Farma Tbk is weighing aproposed merge and acquisition (M&A) to seek lucrative synergy.
Vidjongtius, Corporate Secretary of the company in a public announcement to Indonesia Stock Exchange in late Friday last week, said Kalbe is always looking for a chance to enlarge its business by unorganic growth, such as merge and acquistion. Kalbe doesn't negate its path to probe a possibility buyout option of PT Bristol-Myers Squibb Indonesia Tbk.
A source familiar to that matter said Kalbe has appealed Credit Suisse to help a nimble buyout scheme.

Bleak problems engulf Berau

Some bleak problems are now saddling a divestment of up to 90% of a holding firm of PT Berau Coal, fifth biggest coal digger in Indonesia.

Some investment bankers said the biggest stumbling block of the sale is a faltering account receivable in Berau to its share holders. "Who ever buyers win Berau, they have to heed the problem."

Berau Coal is 51% steered by Rizal Risjad, a son of tycoon Ibrahim Risjad, while the remaining is owned by Rogner and Shojits, Japan. Rizal and Rogner are intending to offload 90% of their ownerships in Berau.

"So far Rizal wants US$1 billion in cash for 90% of Berau. But, regarding to the receivable problem, the price must be shrunk," he said.

Along with the problem, Berau has some notes of around US$300 million need to be redemmed in 2011.

Kalbe eyes on Bristol-Myers

A giant integrated drug maker PT Kalbe Farma Tbk is eyeing majority shares of a medicine firm PT Bristol-Myers Squibb Indonesia Tbk.

According to a source familiar to that matter, with a help from foreign investment bank, Credit Suisse, Kalbe is rolling out strategy to acquire Bristol-Myers.

"Concurrently, Kalbe is facing a daunting competition from Saratoga Capital-Edwin Soerjajadja," he said few days ago.

Pursuant to Bristol's first quarter financial result, nearly 100% of the company is reined in by 345 Park Corporation, while a crumb portion of 2% belongs to public investor. Bristol's controlling share holder is eager to offload 98% of shares. "If Kalbe or other investors would be the new majority owner, they necessitate a tender offer for the rest of Bristol's shares."

With its equity of Rp255.80 billion, book value of Bristol stands at Rp24,980 per share.

Stephanus, between Danareksa & Mandiri Sekuritas

A new director of PT Danareksa (Persero), a state-owned investment holding firm, Stephanus Turangan, will be in charge in the capital market, while the position of the other new director, Heru D. Adhiningrat, is internally being discussed.

Both directors, used to work for PT Mandiri Sekuritas, this morning has officially designated by Minister of State-Owned Enterprises Sofyan A. Djalil, to enroll Danareksa.

Stephanus, former director of capital market at PT Mandiri Sekuritas, a brokerage firm wholy steered by the state bank, PT Bank Mandiri Tbk, has replaced Harry Wiguna who resigned last month. Soon after fleeing Mandiri Sekuritas, Stephanus joined a Germany based-bank, Deutsche Bank.

Heru, previously handling president director of Mandiri Sekuritas and vice president director of cement maker PT Semen Gresik Tbk, will sharpen Danareksa's grip in the capital market.

Stephanus has fabulous relations in the debt market, while Heru is backing him in the equity market. A Jointly combination of both will boost an undewriting league table of Danareksa Sekuritas, a brokerage unit of Danareksa (Persero), surpassing its daunting contender Mandiri Sekuritas.

In the debt market, excluded MTN, Danareksa Sekuritas ranked first with 16.5% of market share, totalling bond underwriting of Rp2.37 trillion during the first half this year. It has beaten Mandiri Sekuritas, which ranked fifth with merely 4.3% of market share.

Since Director of Capital Market Mandiri Sekuritas Indrawati Darmawan decided to resign, her predecessor Mirza Adityaswara takes the controll. But, so far, Mandiri Sekuritas league table is sharply outpaced by Danareksa. What's wrong with Mandiri Sekuritas?

A plenty exaggerated collaboration with its holding, Bank Mandiri, Mandiri Sekuritas should rank first in both debt and equity underwriting market, hammering Danareksa Sekuritas.

Not so Smart to prop up Fren

A frenzy shares trading of PT Mobile-8 Telecom Tbk won't persist if no single telephone operators emerge their fast acquisition plans to the CDMA provider partly owned by PT Global Mediacom Tbk.

Mobile-8 doesn't have an intact financial fundamental and lack of catalist to underpin its shares price.

Market talks yesterday said Mobile-8 has been a buyout target of PT Bakrie Telecom Tbk, a CDMA provider with its brand Esia. But, it is an ancient story to boost Mobile-8 price.

The problem is does Bakrie Telecom really need to prop up Mobile-8? Bakrie Telecom elicits more sustained operator than a wounded firm. In fact, Mobile-8 has a deluged debt and crippled by daunting net lost.

"They don't need to buy Mobile-8. Let Fren operator dying naturally," an analyst told me this morning.

With a net loss of Rp270 billion and Rp457 billion of equity, Mobile-8 can brace its capital from zero during two years. If share holders were reluctant to inject new capital, the operator going concern would be untenable. "Withing two years, net loss will devastate Mobile-8. So, it needs a new saviour or rights issue," an analyst said.

My source said one of the owner of Mobile-8 is initiating talks with a telephone unit of Sinarmas, Smart Telecom, not with Bakrie Telecom.

Financially, Smart remains intact compared to its contender, Bakrie Telecom. If Smart continued its negotiation, at what price Mobile-8 will be acquired? With the lowest level price of Rp50 per share, Mobile-8 shares are still expensive.

"All will be possible if Mobile-8 took a 10 fold reverse stock to Rp500, and then, let the shares price tumbles to Rp50," he said.

Why did Huaneng pull out from Berau?

It seems a list scroll of PT Berau Coal's bidders is gradually shrinking after Huaneng Power International, a power producer in China, and the biggest cement firm, Siam Cement decided to cease their due diligence.

A source familiar to the matter said Huaneng and Siam Cement dediced to scrapp the deal as unclear sale structure of the fifth biggest coal producer in Indonesia. On one hand, Rizal Risjad, a controlling share holder who is son of tycoon Ibrahim Risjad as well, hammers out Berau's divestment scheme, helped by three investment banks, Deutsche Bank, Merrill Lynch, and Pacbridge Capital.

But, on the other hand, Rizal has designated Bahana Securities to prepare Berau's initial public offering.

Some said that Rizal needs to convince potential bidders about the sale. Last year, a potential bidder from Surabaya named Kentjana Widjaja, using his arm Quattro Investama, offered up to 90% of Berau shares at US$1 billion. But, rizal didn't take the offer.

Today, there are five potential buyers conduction due diligence on Berau. They are Indika Energy, an arm firm controlled by conglomerate Sudwikatmono, Medco Energi Internasional, whole owned by a tycon Panigoro family, Indo Tambangraya Megah, a unit of Thailand Banpu Plc, Quattro Investama, and Recapital Advisors, backed up by Bumi Resources, a coal firm of Bakrie Group.