Thursday, August 24, 2006

Since Lapindo disaster, ENRG lost 23% its value

Since the first erruption of mud at Lapindo Brantas Inc's Banjar Panji-1 drilling in early June, the value of PT Energi Mega Persada (ENRG) Tbk---Lapindo's parent company, had declined steadyly by 23%. How low will ENRG go?

In early June, ENRG share price was Rp740 and closed at Rp570 on Wednesday. The price is very much below the target price of Rp870/share for the merger plan with PT Bumi Resources (BUMI) Tbk. Bumi shares were traded at Rp770 yesterday's closing. Both Bumi and Energi are related to Bakrie Family.
It's not clear whether the decline in ENRG shares have something to do with increasing pressures toward Lapindo and potential financial liabilities at Energi due to uncertainty over the mudflow disaster. Neither is clear of financial impact should government force Lapindo to completely shutdown the Banjar Panji-1.
The ongoing delay of PT Borneo Lumbung Energi's acquisition of two Bumi subsidiaries (Kaltim Prima Coal and Arutmin Indonesia) make things even worse for ENRG and Bakrie Family. This is a very-low-point situation. Hold your breath. Could be lower than that...

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Anonymous Anonymous said...

The million dollar question is...
How LOW can it go?

August 24, 2006 3:35 PM  
Anonymous Anonymous said...

there isnt a better than N.O.W to buy into this company. why? because market has clearly overreacted. there is NO way the Lapindo disaster could measure up to 20+% of Energi's total value

August 24, 2006 6:25 PM  
Anonymous Anonymous said...

Do you really think the market has overreacted?

August 25, 2006 1:51 PM  
Anonymous Anonymous said...

Of course.

what is 20% of Energi's mkt cap earlier this year? around USD1.2bn
if you lose 20% that would equal to approximately US$240m

Will the Lapindo disaster cost Energi US$240m?

Of course calculation is extremely rough here but you get my point. Energi is NOT a small sized company by any means.

August 25, 2006 3:49 PM  
Anonymous Anonymous said...

Yes the market is indeed overreacted, buy now when the shares is undervalued, and go short when i goes up to normal.

August 28, 2006 12:06 AM  

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