Apr 10, 2011

Bakrie aims to reduce Rp3 trio debts

Flagship company of Bakrie family PT Bakrie & Brothers Tbk (BNBR) is aiming to narrow its Rp3 trillion debt this year, striving to restructure and renegotiate of its short term debts.
The 2010's financial report recently published by the company revealed that Bakrie reported a Rp7.48 trillion of total debts, a 17.53% decrease from Rp9.07 trillion in the previous year.
Bakrie's President Director Bobby Gafur Unar said the company decided to take several actions in a bid to narrow accumulation of losses as a result of global crisis in 2008.
"We were suffering a huge net loss last year as we tried to 'clean up' our balance sheet. We bought some portfolios using 2008's benchmark price. However, we decided to adjust the portfolios using current market prices," he said.
As an example, Bakrie booked some stocks in PT Bumi Resources Tbk at Rp5,400 per share, but it sold the asset based on the current market price. In return, Bakrie suffered a huge losses on portfolios sale of Rp10.26 trillion. 
"We intend to shrink our debt of Rp3 trillion-Rp3.5 trillion this year. But, we are also planning to seek new financing facilities," he said.
Pledging Vallar shares
Despite its attempt to reduce its debt, in March, Bakrie & Brothers has obtained a new loan facility of US$601 million using Vallar new shares as guarantees.
Bakrie obtained the new loan from Credit Suisse, AG, Singapore Branch. The 1-year facility, charging an annual interest rate of Libor + 6%, has been used by Bakrie & Brothers to refinance its debts to three lenders which have been secured by some shares of its subsidiaries, including Bumi Resources.

Disclosure: No position at the stock mentioned above.
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