Northstar to assume Bakrie’s debts
Indonesian private equity firm Northstar Pacific Partners agrees to takeover US$575 million, or a majority amount of PT Bakrie & Brothers Tbk’s debt to Odickson Finance SA in exchange for ownership in coal miner PT Bumi Resources Tbk (BUMI).
Odickson, a British Virgin Island financial institution, gave a short term loan totaling US$1.086 to the Indonesian conglomerate in April this year as part of an effort to consolidate the company’s ownership in its publicly listed subsidiaries.
Ironically, with the current global crisis setting in, Bakrie has been forced to compromise its stake in its group of companies, particularly its 35% ownership in Indonesia’s biggest exporter of power station grade coal, BUMI, to pay off the pile of debts it has collected.
Analysts have been skeptical whether the deal with Northstar, an Indonesian affiliate of American private buyout firm TPG Capital (TPG.UL), would go through as BUMI controls PT Kaltim Prima Coal and PT Arutmin Indonesia, both of which are Bakrie’s prize assets. Bakrie announced earlier this month that it agreed to sell its entire 35% stake at BUMI, but news sources indicated it may only end up letting go 20-25%.
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