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Indonesia lifts ban on trading of Bakries firms


October 19, 2008

Indonesia lifts ban on trading of Bakries firms

Indonesia lifted a trading ban on three firms controlled by the billionaire welfare minister Friday, an official said amid reports of a government rescue plan for his debt-ridden group, Reuters reported.

The companies belong to or are controlled by the family of Aburizal Bakrie, the country's richest man and a powerful member of the Golkar party which dominates President Susilo Bambang Yudhoyono's ruling coalition.

"We had suspended trading as the group was undergoing restructuring. But it has since sold some assets. The company has stabilised," Indonesian stock exchange chief Erry Firmansyah said.

Bakrie Sumatera Plantations, property company Bakrieland Development and Bakrie Telecommunication resumed trading for the first time since they were suspended amid market turmoil on October 7.

Dealers said the stocks fell by 10 percent each in a generally bearish market. Indonesia's main index has fallen 3.6 percent since the start of the week and 49 percent since the start of 2008.

Trading in three other firms -- parent company Bakrie & Brothers, Energy Mega Persada and the world's largest exporter of thermal coal, Bumi Resources -- was still suspended, Firmansyah said.

Shares in Bakrie & Brothers and its five subsidiaries crashed by 25 to more than 40 percent on October 7 before the authorities halted trade.

Analysts said investors were concerned over the group's ability to service debt amid the global liquidity crisis.

The group has offered shares as collateral for loans worth 1.2 billion dollars, with the first 200 million dollars due by the end of the year and the remainder by April.

Moody's Investors Service announced a rating review last week, saying Bakrie's "rapidly deteriorating financial profile" and the trading suspension had "substantially eroded investor and creditor confidence."

But Bakrie & Brothers has denied it is in danger of defaulting and on Friday announced it had raised 56 million dollars from selling part of its stakes in Bakrieland Development and Bakrie Sumatera Plantations.

The turmoil has forced Bakrie & Brothers to dilute its controlling stakes to raise cash. Director Ari Hudaya said Sunday potential buyers included US-based fund Asia Avenue, Credit Lyonnaise and India's Tata Group.

"We will sell our stakes... but we will not lose our control (of our subsidiaries)," Hudaya said at a press conference, according to Dow Jones Newswires.

The Jakarta Post quoted officials as saying state-owned resource companies were in talks over a plan to step in and buy some of the Bakrie family's 35-percent stake in Bumi worth 1.4 billion dollars.

Bakrie & Brothers director Dileep Srivastava did not confirm the story but said the group was "open to dialogues with interested parties."

"We are looking to local or foreign companies, it is all open," he told AFP.

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