Northstar to take over Indonesian conglomerate Bakrie's debt
Time is GMT + 8 hours Posted: 29-Nov-2008 19:08 hrs
Northstar Pacific Partners Ltd. has agreed Friday to take on 575 million US dollars of Indonesian conglomerate Bakrie group's debt, according to executives. Holding company Bakrie Brothers, which is controlled by the billionaire welfare minister Aburizal Bakrie, will form a venture with Northstar to control giant coal miner Bumi Resources.
Northstar Pacific Partners Ltd. has agreed to take on 575 million US dollars of Indonesian conglomerate Bakrie group's debt, according to executives.
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Holding company Bakrie Brothers, which is controlled by the billionaire welfare minister Aburizal Bakrie, will form a venture with Northstar to control giant coal miner Bumi Resources.
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The agreement will allow Northstar to have a stake in Bumi as its shares were the debt's collateral, Bakrie president director Nalinkant Rathod told Dow Jones Newswires on Friday.
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The exact percentage of Northstar's stake in Bumi was not confirmed.
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Prior to the agreement, Bakrie agreed to sell its 35 percent stake in Bumi to raise 1.3 billion dollars to pay its debt.
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But Bumi's stock fell to about half of the initial selling price of about 2,000 rupiah (16 cents) as of Friday.
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Bakrie finance director Yuanita Rohali said the debt Bakrie owed to Oddickson Finance was the debt that Northstar would take over.
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The British Virgin Island-based Oddickson lent 1.1 billion dollars in April to Bakrie and has had 70 million dollars returned.
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Rohali said Oddickson had agreed to turn its remaining loan to Bakrie into stakes in other Bakrie companies, such as Bakrieland Development and Energi Mega Persada.
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Rohali added that the Jakarta-based Anchora Capital planned to take over 72 million dollars of Bakrie's debt to JPMorgan and would convert the debt into a stake in Bumi.
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Bumi operates the Kaltim Prima and Arutmin mines in Indonesia, the world's largest thermal coal exporter.
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Bakrie Brothers still owes 105 million dollars to India's ICICI Bank and 81.5 million dollars to several local lenders.
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Aburizal Bakrie, the main financial backer of President Susilo Bambang Yudhoyono's election campaign in 2004, was considered Indonesia's richest man with a family fortune estimated by Forbes Asia magazine at 5.4 billion dollars.
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But the global financial crisis and plummeting commodity prices have damaged the family business. Lapindo Brantas, which is owned by a Bakrie subsidiary, has been ordered to compensate the victims of a volcano mudslide which displaced 36,000 people and is largely believed to have been triggered by Lapindo's gas exploration.
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Last week, Aburizal Bakrie said he would not be seeking another term in the cabinet next year. — AFP
