Bakrie Sumatera eyes on bank loan and bonds

PT Bakrie Sumatera Plantations Tbk seeks bank loan or convertible bonds to meet the obligation of the subsidiary firm, Agri Resources Pte Ltd, worth US$150 million with due date in 2012.
Bakrie Sumatera with 52 percent shares possession of Agri Resources had the rights to increase its ownership up to 100 percent.
President Director of Bakrie Sumatera Ambono Janurianto said Agri Resources always fulfill the bond coupon payment.
"The fulfillment of subsidiary firm obligation matured in 2012 could be covered by some options such as partial payment, convertible bond issuance or bank loan," he said last week.
He said the company has execution rights for rising shares ownership at the Agri Resources up to 2013.
"We have increased 20.5 percent shares in the Agri Resources into 52 percent. The chance to increase shares up to 100 percent could be done up to 2013 with some conditions."
If Bakrie Sumatra plans to increase its shares possession at the Agri Resources, the price will refer to the internal rate of return (IRR) of 23 percent. "But the other shareholders of Agri Resources want us to increase shareholding with IRR price reference of 17 percent."
The company got cheap financing form Agri Resources. "We have to pay the cost referring to IRR and reduced by the dividend of the shareholders portion."
Ambono said the shareholders of Agri Resources in addition to Bakrie Sumatera includes the US hedge fund subsidiary firm of Jefferies Group Inc, Jefferies Singapore, Spinnaker Global Emerging Markets Fund Ltd, and Lim Asia Arbitrage Fund.
Agri Resources through its subsidiary firm, Agri Resources BV, has two palm oil plantations in 56,618 hectare plots of areas in Sumatra with some 30,195 hectares planted.
Rating company of Moody's Investor Services has just cut down the bond rating of Agri Resources as from B3 into Caa1.
The rating drop reflected the fear of rating company to the capacity of AGri Resources to meet the obligation with limited operational scale, high debt ratio and limited financial scope
Agri Resources generated US$5 million earning before interest, tax, depreciation, and amortization quarterly in semester I/2009. the payment ob bond coupon worth US$150 million is US$19 million annually which might burden the corporate finance.
The stock price of Bakrie Sumatera last week was closed declining 3.3 percent into IDR880 as from IDR910 on previous closing. The market capitalization stood at IDR3.33 trillion.