In an analyst briefing last week, management of PT Delta Dunia Makmur Tbk (DOID), parent company of Indonesia second largest coal mining contractor PT Bukit Makmur Mandiri Utama (BUMA), said that DOID is looking for a possible acquisition of 51%-80% stakes in PT Berau Coal Energy, a transformation company of PT Risco.
DOID will buy mandatory exchangeable bond (MEB) of Rp10 trillion issued by PT Bukit Mutiara, holding company of Berau Energy. Recapital Advisors controls 100% stakes in Bukit Mutiara.
The MEB will be converted into Berau Energy in April 2011, while Berau Energy is planning to enter Indonesian capital market in June this year. DOID will use proceed from rights issue, expected to grab Rp10 trillion or Rp1,400 per share, to buy MEB.
According to CLSA's news research of analyst Ahmad Solihin published on April 4 2010, this would be post IPO stakes or the enlarged capital of Berau Energy. The aim is to secure around 60% to 80% in Berau Energy.
But, pricing of Berau deal remains unclear. While IPO price for Berau Energy would be used as reference, management is currently still negotiating various pricing alternatives if IPO is not proceeding as planned. There will also be mechanism to transfer some of the rights issue fund back to Delta Dunia should the company
needs less than US$1.1 billion for the deal.
DOID argued that acquisition of Berau Coal, as presented by management, are to secure more contracts from Berau Coal as the mine is planning to double its outputs post changes in control. Secondly, the deal would align Delta Dunia with Bakrie Group that owns some of the biggest coal mines in Indonesia. The latter is, effectively, a confirmation that Bakrie Group will have greater influence in Delta Dunia going forward.The MEB will be converted into Berau Energy in April 2011, while Berau Energy is planning to enter Indonesian capital market in June this year. DOID will use proceed from rights issue, expected to grab Rp10 trillion or Rp1,400 per share, to buy MEB.
According to CLSA's news research of analyst Ahmad Solihin published on April 4 2010, this would be post IPO stakes or the enlarged capital of Berau Energy. The aim is to secure around 60% to 80% in Berau Energy.
But, pricing of Berau deal remains unclear. While IPO price for Berau Energy would be used as reference, management is currently still negotiating various pricing alternatives if IPO is not proceeding as planned. There will also be mechanism to transfer some of the rights issue fund back to Delta Dunia should the company
needs less than US$1.1 billion for the deal.
Interestingly, DOID's CEO Mr. Hagianto Kumala, who used to be CEO for United Tractors, also mentioned that the trend is for concession owner to control a greater share of production as indicated by Adaro Energy and Bumi Resources.
He thought that there is more production upside in Berau Coal, believing that multiple changes in Berau Coal ownership over the past seven years have resulted in slower-than-peers-growth. But, CLSA remains sceptical that acquiring controlling stakes in a coal company is the right way to go.
Who is PT Risco?
According to a reliable data I got from someone, Risco is a parent company established on September 7 2005. It was founded by Selviya Risjad (10%) and Rizal Risjad (90%), son of Indonesian tycoon Ibrahim Risjad during former President Soeharto era.
A year latter, in May 2006, Handy Purnomo Soetedjo acquired 10% of the shares from Selviya and another 10% from Rizal Risjad.
Within the same month, Garibaldi Thohir, one of shareholder of PT Adaro Energy Tbk (ADRO), bought 15% of Risco's shares from Rizal Risjad. So, now Risco is controlled by three Indonesian stellar businessmen Rizal Risjad (65%), Handy Purnomo (20%), and Garibaldi Thohir (15%).
According to a reliable data I got from someone, Risco is a parent company established on September 7 2005. It was founded by Selviya Risjad (10%) and Rizal Risjad (90%), son of Indonesian tycoon Ibrahim Risjad during former President Soeharto era.
A year latter, in May 2006, Handy Purnomo Soetedjo acquired 10% of the shares from Selviya and another 10% from Rizal Risjad.
Within the same month, Garibaldi Thohir, one of shareholder of PT Adaro Energy Tbk (ADRO), bought 15% of Risco's shares from Rizal Risjad. So, now Risco is controlled by three Indonesian stellar businessmen Rizal Risjad (65%), Handy Purnomo (20%), and Garibaldi Thohir (15%).
Then, Risco acquired 83.3% of shares in PT Armadian Tritunggal from David Jahja, Henry Ngadimin, and PT Mentari Bukit Makmur. Risco bought 16.7% shares in Armadia from Rizal Risjad in April 2007.
How does Risco control Berau?
Berau was established in 1983 as a joint venture between Ophelis Investment Limited, a unit of Mobil Oil Corporation, now known as Exxon Mobil Corporation (60%) and Nissho Iwai Corporation of Japan or now as Sojitz (40%). In 2002, PT United Tractors Tbk (UNTR), subsidiary of PT Astra International Tbk (ASII), controlled 21%, Armadian (30%), UT Heavy Industry (S) Pte Ltd (39%), and Sojitz (10%).
In July 2004, UNTR and UT Heavy Industry sold all their shares in Berau To Armadian and Rognar respectively.
To be continued...
To be continued...
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