Friday, December 16, 2005

EMP buyout Indra Bakrie's oil business

Listed-energy company PT Energi Mega Persada announced few days ago a US$300 million rights issue to primarily fund the acquisition of 99.99% shares of PT Tunas Harapan Perkasa (THP) for a total cash consideration of approximately US$284 million.
THP is a holding company of with five fully-owned subsidiaries with interests in various oil and gas production sharing and technical contracts in Indonesia. THP assets have combined proven and probable reserves of 435 BCF of gas and 31 million barrels of oil.
Subsidiaries of THP are PT Sembrani Persada (100% working interest in Sembrani TAC), PT Insani Mitra Gelam (100% of Sungai Gelam TAC), Costa Int'l Group (Gebang PSC), Kalila (Bentu) Ltd (Bentu PSC), and Kalila (Korinci) Ltd (Korinci Baru PSC). Bentu and Korinci PSCs were initially developed by Australian company Santos.
Shareholders of PT Energi Mega Persada are PT Kondur Indonesia (30.99%), PT Brantas Indonesia (30.99%), Julianto Benhayudi (3.31%), Rennier Abdul Rahman Latief (4.71%), public 30%. CSFB Singapore owns 14.75%, almost half of EMP's floating shares in Jakarta Stock Exchange (JSX). Kondur and Brantas are owned by Bakrie family and some business partners.
The acquisition is deemed a conflict of interest transaction as THP's major shareholder is also one of key shareholders of PT Energi Mega Persada. Who is he? Indra Usmansyah Bakrie, the youngest brother of Aburizal Bakrie, coordinating minister for people's welfare and former coordinating minister of the economy.
He holds the majority share of PT Austral Byna, a logging company with concession area of almost 300,000 hectares in Kalimantan. He was business partner of Jopie Wijaya in transportation company PT Infinity Indomarga. Few years ago, he was the CEO of PT Bakrie & Brothers, flagship company of Bakrie Family.
Indra Bakrie through Kalila is the main financier for basketball club Kalila, co-found the famous Twilight Orchestra and just recently Magenta Orchestra. With US$284 million cash, I hope Indra would invest more in basketball and orchestra, so we could have more funtastic society.

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