Bakrie & Brothers to Sell Off Pipe Interests to Raise $150m
Bakrie & Brothers, the holding company for the Bakrie family’s business interests, wants to raise $150 million from selling its stake in two units, a director at the company said on Wednesday.
Eddy Soeparno, finance director at Bakrie & Brothers, said proceeds from the sale will be used to fund the company’s investment plan.
“The option to sell assets is the right solution as the condition in the market is not conducive,” Eddy said.
Bakrie & Brothers plans to sell stakes in steel pipe producer Bakrie Pipe Industries and steel pipe exporter South East Asia Pipe Industries.
The plan to sell stake in BPI and SEAPI is part of a greater plan to sell its pipe-related companies.
In 2009, Bakrie & Brothers took the first step toward that goal by selling 77.45 percent of its stake in Seamless Pipe Indonesia Jaya. The buyer was Tenaris, a Luxemburg-based pipe manufacturer, who paid $73.5 million for the share.
In regards to Bakrie & Brothers’ investment plan, the company, through subsidiary Bakrie Tosan Jaya, wants to buy a unit of Korindo group, the distributor of spare parts for Hyundai automobiles.
Bakrie & Brothers has set aside Rp 300 billion ($32 million) for the purchase.
Separately, the president director of Bakrie & Brothers, Bobby Gafur Umar, said the company was developing a number of infrastructure projects in Kalimantan, Sumatra and Java islands.
“We are looking for partners who can support us with financing as well as the technology,” Bobby said.
Eddy also gave an update on the progress of paying back the remaining $437 million in debt to a number of creditors led by Credit Suisse. “It has been 50 percent completed,” he said.