Tuesday, September 05, 2006

Energi spin-off Lapindo to Bakrie Group

As reported earlier, PT Energi Mega Persada Tbk confirmed the plan to spin-off Lapindo Brantas Inc which is currently at the center of an unstoppable hot mudflow in Porong, East Java, to Bakrie Group.

Finance director of Energi Yuli Soedargo stated in a press release to Detik.com that the divestment "would hopefully help Energi maintain its healthy operation and financial performance."
Energi share price had dropped almost 24% since the first eruption of mud at Lapindo's Banjar Panji-1 drilling well in May 29 and no sign of immediate end to the disaster that forced thousands of people left their homes vacant (covered by mud), thousands lost their jobs, and cost the company millions of US dollar. Several of the company's executives, contractors, and sub-contractors involved in the drilling activity have been named suspects by East Java police for environmental pollution case. Gov't had asked Bakrie family to take full responsibility in handling the disaster despite calls to have government share the burdens.
Under the spin-off plan, Energi would divest Kalila Energy Ltd and Pan Asia Enterprise (both registered in Hong Kong) which co-own 99% shares at Lapindo Brantas Inc. Lapindo Brantas is the operator of Brantas PSC (50% participating interest) with Medco Energi and Santos held 32% and 18% respectively.
No details available on how much Bakrie Group would pay the two companies. Neither available the impact on Energi's portfolio considering Brantas PSC's contribution in the past.
The spin-off plan, while criticized by many of washing-hands operation, would pave the way for Energi's plan to merge with PT Bumi Resources Tbk. Bumi itself is struggling to convince investors about its future after the collapse of US$3.2 billion divestment of coal mines assets (PT Kaltim Prima Coal, PT Arutmin Indonesia, and Indocoal). Bumi is scheduled to have analyst meeting on Wednesday to explain its financial performance in first half which some says below expectations. Earlier reports said Bumi's EBITDA for first half 2006 was only US$104 million. The company has been rumored of recorded net loss of US$1 million in the period. But others says Bumi would come up with more promising figures in the analyst meeting today.

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Anonymous Anonymous said...

If the spin-off would occur, it will be very interesting who will take the responsibilities for Lapindo Brantas.

September 06, 2006 9:26 AM  
Anonymous Anonymous said...

There is no actual change , that's from left pocket to right pocket.

September 06, 2006 10:53 AM  
Anonymous Anonymous said...

May be left to right pocket for Bakrie, but it would be good news for minority shareholders in Enrgi Mega

September 06, 2006 12:01 PM  
Anonymous Anonymous said...

but no doubts left pocket and right pocket both r empty!

September 06, 2006 6:57 PM  

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