Jan 23, 2012

Bumi, Berau to merge via shares swap

Coking coal producer PT Borneo Lumbung Energi & Metal Tbk (BORN), a new owner of 23.8% stake in London-based Bumi Plc, is seeking options to merge between PT Bumi Resources Tbk (BUMI) and PT Berau Coal Energy Tbk (BRAU). 
"To merge between Bumi and Berau, we can explore acquisition or shares swap. All available options will be discussed with other shareholders of Bumi Plc [Bakrie Group and Nathaniel Rothschild]," Borneo President Director Alexander Ramlie told Insider Stories late last week after the signing ceremony of Bumi Plc's takeover completion.
A source familiar with the plan added talks to merge between Bumi and Berau have been held since last year before Bakrie Group suffered a call on US$1.34 billion debt arranged by Credit Suisse as a steep drop of Bumi Plc shares below 8.5 pound sterling.
Bumi Plc currently manages two subsidiaries Bumi Resources and Berau Energy. Non-coal company PT Bumi Resources Minerals Tbk (BRMS) is still owned via Bumi Resources.
"The structure still can be optimized. Berau Energy should be controlled by Bumi Resources. In return, BRMS would be directly owned by Bumi Plc," the sources said.
At the end, Bumi Plc will control two subsidiaries, coal unit and non-coal unit. Coal unit is Bumi Resources with its subsidiary dubbed Berau Enerny and non-coal unit is Bumi Minerals.
How to do it?
The non-cash transaction is the most possible via shares swap. Based on the last Friday's closing price, Berau Energy's market capitalization was Rp14.83 trillion, while Bumi Minerals' market capitalization was Rp14.57 trillion.
"The size between BRAU and BRMS is equal. Bumi Resources could transfer its ownership in BRMS to Bumi Plc, while in return, Bumi Resources would obtain BRAU from Bumi Plc with the swap ratio about 1:1," the source said.
Following the completion of Bumi Plc's takeover by Borneo Energi, Indra Bakrie said Bakrie Group will propose the change of board of management at Bumi Plc. A source said Samin Tan may take the helmet by replacing Indra Bakrie as the chairman.
Bakrie to sell three units
Finance Director Eddy Soeparno at PT Bakrie&Brothers Tbk (BNBR), controlled by Bakrie family, said BNBR plans to dispose three subsidiaries PT Bakrie Tosanjaya, PT Bakrie Pipe Industries, and PT South East Asia Pipe Industries (SEAPI).
"Bakrie Tosanjaya will be set to go public by end of this year or early next year," he said as quoted by Kontan daily. "We will maintain majority stake in Bakrie Tosanjaya," Eddy said.
Bakrie will dispose its stake in Bakrie Pipe and SEAPI to strategic investors. It will sell 40% stake to investors.

Disclosure: No position at the stock mentioned above.

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