BNR on Sale

The State Asset Management Corporation (PPA) has planned to conduct a tender to find financial consultant and legal consultant to sell 70.5% shares of credit asset of PT Bali Nirwana Resort (BNR) as much as IDR1.54 trillion.

In the meantime, BNR has been searching the loan of US$9 million to revitalize the company's resort facility. The President Director of PPA Mohammad Syahrial said that the sales of BNR will take place in the first half of the year.

"At first, we will conduct a tender to get financial consultant, legal consultant and other supporting profession to help PPA to sell the assets," he said last four week ago.

He said PPA has let the management of BNR to search for the loan of US$9 million to revitalize the company's facilities. PPA holds 70.5% shares of BNR after it get the shares from IBRA. The other shares belong to Bakrie Family.

"The management is free. We let them to search for loan as long as our loan is paid off." He said that the sale of the asset has been included in PPA's working plan of 2007.

Four years ago, IBRA has offered 70.5% shares of BNR and the credit assets of IDR1.54 trillion through the program of Assets Sales Batch VI.

Bit IBRA has cancelled the sale as two investors, Japan Asia Investment Corp Indonesia of Japan and Indo Partners of Singapore have asked for difficult requirements to meet.

The President Director of BNR Henu Kusdaryono said the company will synchronize the company's working plan with the plan of PPA to sell the assets.

"We need the loan of US$9 million, but we are still waiting for the approval from PPA. We will do that right away after PPA approves our plan," he said.

He said that the company posted some positive earnings before interest, tax, depreciation and amortization.

He added the company could get fresh capital from banking loan or from bonds issuance.

According to him, the company needs the money to improve the facility of the company's resort to attract visitors.

"We need to improve some facilities including to replace the electric key system to cut energy cost and to improve our SPA to provide value added for visitors."

The asset of BNR includes Le Meridien Nirwana Golf & Spa Resort, managed by Meridien S.A.

The share of PPA has increased from 56% to 70.5% following the US$82 million debt to equity conversion.

At the first step, the debt has been cut from US$40 million to US$20 million, and the rest debt has been converted into shares. On the second step the US$38 million debt has been cut by US$9 million so that the rest debt was US$29 million.

Therefore the outstanding debt of BNR was US$29 million at the interest rate of Singapore inter bank offered rate (SIBOR) plus 1%.