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Bakrie Joins forces with Rothschild Banking Dynasty in Major New Coal Deal
Eric Onstad & Janeman Latul | November 16, 2010

Indonesia’s powerful Bakrie family has joined forces with the Rothschild banking dynasty to cement its dominance of Indonesia’s booming coal sector, announcing a deal that will combine stakes in three companies and list in London. Indonesia’s powerful Bakrie family has joined forces with the Rothschild banking dynasty to cement its dominance of Indonesia’s booming coal sector, announcing a deal that will combine stakes in three companies and list in London.
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batikbooby
9:58am Nov 23, 2010

it's news like this that really does make you wish the dutch were back in charge! if bakrie is a serious contender for presidency in 2014 then it would pretty much demonstrate that country is doomed

vinod.sao
7:06am Nov 23, 2010

Dear Agoz,

Unfortunetly the PLN and relevant Ministry is notvallocating coal resources to those investors, willing to bid for IPP. Coal and IPP are two seperate ventures here and there is no integration plan to bring it together so that the IPP company should have access to cheaper and secured supply of coal, which will ultimately result in cheaper production cost to benefit the citizens at large.

There is no harm of strengthen Bakri gp by this new vehicle only State requires to ensure Taxes and Revenues to benefit out of this deal and Export of greater quantity of coal. To ensure domestic coal supply, there is already enough provisions have made in the New Mining Law 2010, if implemented properly.


Wong Edan
8:39pm Nov 18, 2010

@agoz: "according syaria law, mining should not be privatized". Ha ha. Did your "prophet" study economics as well?

Power shortages are not the result of "exporting gas and coal outside" (you didn't mention oil - but then Indonesian is now an oil importer, having to leave OPEC in humiliation): they are a result of underinvestment in power generation - partly because of the presence of too many people like you ruining the investment climate.


langfordpeter
7:25pm Nov 18, 2010

Given the like of agoz and his kind, I will opt for Bakrie. The less of two evils

devine
3:38pm Nov 17, 2010

agoz. Are you not seeing how inefficient state companies work? You are of course welcome to go digging for coal by yourself once your chaliphate is established... much better seeing you there instead in front of your keyboard :-)

London/Jakarta. Indonesia’s powerful Bakrie family has joined forces with the Rothschild banking dynasty to cement its dominance of Indonesia’s booming coal sector, announcing a deal that will combine stakes in three companies and list in London.

Bakrie Group, run by the family of politician and tycoon Aburizal Bakrie, is joining miner Berau Coal with prize asset Bumi Resources in a share swap deal with Vallar, the mining investment fund established by financier Nathaniel Rothschild earlier this year.

Bakrie will gain majority control of London-listed Vallar and rename it Bumi Plc, a symbol of a move that means Indonesia’s biggest coal producer gains a greater share of the global market.

“This is a reverse takeover where the Bakrie Group is regrouping its coal mining assets,” said Norico Gaman, the head of research at Jakarta brokerage PT BNI Securities. “Vallar is
only a vehicle for the Bakrie Group to consolidate its assets.”

“Bumi is now aiming to become one of the biggest global players in the coal industry,” Gaman added.

As part of the deal, Vallar will pay $3 billion in cash and new shares to buy a 75 percent stake in Berau and 25 percent of Bumi in its first deal since raising $1.1 billion and listing in July.

“We’ve announced the creation of an Indonesian coal champion ... [that] is going to be the largest supplier of thermal coal to China,” Vallar co-founder Nathaniel Rothschild told a conference call in London.

“This is a business that by 2013 should produce 140 million tons of coal a year.”

Bakrie Group will own 43 percent of Bumi Plc, while 28.3 percent will be owned by existing Vallar ordinary shareholders.

Bakrie & Bros, the holding firm for Bakrie Group, said on Tuesday it swapped 5.2 billion shares in Bumi at Rp 2,500 a share, or a 2 percent discount to Bumi’s closing price on Monday, for new shares in Vallar.

Bakrie & Bros said in a statement it will control management appointments for both Bumi and Vallar.

Bumi already controls 10 percent of the global thermal coal market, while Berau is the fifth biggest coal firm by output in the world’s largest exporter of thermal coal, which is seeing growing demand from utilities in India and China.

Shares in Bakrie & Bros closed 5.3 percent higher, while Bumi and Berau both rose 2 percent, to outperform a broader Jakarta market up 0.5 percent.

Credit Suisse was Bakrie’s sole adviser for the deal.


Reuters