ASEAN KEY DESTINATIONS
Indonesian coalminer to repurchase 17% of outstanding shares
Indonesia's largest coal producer PT Bumi Resources Tbk plans to buy back 17 percent of its outstanding shares, Reuters quoted a company official as saying Friday.
The coal miner will fund the buyback of 3.3 billion shares through a combination of internal funds and available loans. It plans to buy back its shares at an average price of 2,500 rupiah ($0.217), for a total of around $716 million.
The buyback plan came after Bumi's share price plunged nearly 10 percent in each of the past six trading days on worries about margin trading and the health of its main shareholder, the Bakrie Group.
"This is a visible management response to present market irrationality, negative sentiment surrounding Bumi," Dileep Srivastava, Bumi's senior vice president for investor relations, told Reuters.
He said it will also "inject management confidence in its strengthening business fundamentals, arrest irrational share price decline and deliver enhanced value to our global and domestic stakeholding fraternity".
Bumi shares have dropped by nearly 10 percent each day since a month-long trading suspension was lifted last week. The stock has plunged 85 percent since a mid-June peak but was up 1.7 percent in early trade on Friday.
Bumi is the crown jewel of the business group owned by the family of Indonesia's chief social welfare minister Aburizal Bakrie, whose interests stretch from property to palm oil.
The group borrowed heavily using Bumi shares as collateral, forcing it to look for a sale when the shares fell as the commodities' bubble deflated.