Indonesian family-run business group Bakrie & Brothers yesterday announced it is looking to sell stakes in several of its major subsidiaries in order to settle debts thought to be worth USD1.2 billion. The Financial Times writes that the debts were guaranteed by shares that have shed roughly three-quarters of their value in recent months. Bakrie & Brothers says it is also encouraging the companies it controls to buy back as many shares as possible.
The Indonesian group’s announcement confirms recent speculation that it is in financial trouble after becoming ‘overleveraged’. The Financial Times say the rumours contributed to the Jakarta stock market crashing over three days before being suspended last Wednesday. Although the firm’s announcement has been welcomed, some industry watchers say it could fail to calm panic in the market as Bakrie & Brothers has yet to confirm how it plans to raise enough money through share sales and still retain control. Along with Bakrie Telecom, the companies it is looking to sell shares in are Bumi Resources, one of the world’s largest thermal coal companies, Energi Mega Persada, Bakrie Sumatera Plantations and Bakrieland Development. Credit Lyonnaise, Avenue Asia Capital of the US and India’s Tata Group are believed to have expressed an interest, while Bakrie is also in talks with Sampoerna and the Djarum Group.