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Indonesia’s Bumi Resources allowed to resume trading

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November 6, 2008

Indonesia’s Bumi Resources allowed to resume trading
Shares in Indonesia's top coal miner, PT Bumi Resources, fell more than 9 percent on Thursday after the stock exchange lifted a trading suspension that had in been place for around a month, reported Reuters.

Bumi, which is controlled by the family of Indonesia's chief social welfare minister, Aburizal Bakrie, is the core asset in the Bakrie group.

Concerns about the financial health of the politically connected Bakrie group contributed to a sharp sell-off in Indonesia's stock market, prompting the authorities to close the exchange for three days last month.

The Indonesia Stock Exchange had sought to lift the trading suspension on Bumi on Wednesday, but the bourse later said on its website it had delayed the move on a request from the government.

Local media has reported splits among top officials over the issue of the suspension, although Erry Firmansyah, president of the stock exchange, declined to elaborate on Wednesday on why the government had asked for the trading halt to remain in place.

Shares in Bumi fell 9.2 percent to 1,975 rupiah after the suspension was lifted on Thursday. The exchange has a downward limit of 10 percent.

The overall market .JKSE was trading down 4.14 percent by 0310 GMT.

PT Bakrie & Brothers Tbk, the group's holding company, said last month it hoped to raise $1.2 billion by selling off stakes in various assets, including Bumi Resources.

The company, which has interests in energy, property and telecoms, borrowed more than $1 billion last year, using shares of Bumi Resources as collateral for the loan, but after peaking in June the shares had tumbled 75 percent before being suspended.

Bakrie & Brothers said on Saturday it had agreed to sell a 35 percent stake to Northstar Pacific, declining to say whether it was the sole buyer, or leading a consortium of other firms.

Northstar Pacific is run by Indonesian banker Patrick Walujo, a former Goldman Sachs banker, and has a joint venture with US buyout firm TPG Capital.

Indonesian state coal mining firm PT Tambang Batubara Bukit Asam, said on Sunday that the group was part of a consortium, but did not elaborate.

San Miguel Corp of the Philippines also said on Tuesday it would bid for a stake in Bumi, in an apparent rival offer to private equity firm Northstar.

The Indonesia Stock Exchange imposed a trading halt on shares of six companies owned by the Bakrie family on October 7.

As of Thursday, trading suspensions remain in place for PT Bakrie & Brothers and PT Energi Mega Persada Tbk.

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