Monday, October 16, 2006

Bumi buyback & Lapindo divestment

PT Bumi Resources Tbk has started shares buyback late last week with initial purchase of around 9 million shares at Rp760-770/share. Bakrie-linked brokerage firm PT Danatama Makmur was the agent for the buyback. Plenty more to follow, 1.9 billion shares with total value around US$250 million.

Meanwhile, PT Energi Mega Persada Tbk told JSX yesterday that it's looking for financing of Lapindo Brantas Inc loans related to US$120 million notes issued by Malacca Brantas Finance BV.
Under the divestment plan, Energi needs to settle third party loans chanelled to Lapindo Brantas. Energi has signed sales & purchase agreement (SPA) with Bakrie Oil and Gas Limited, in which Bakrie would pay US$2 for Energi shares in Lapindo.
Lapindo Brantas Inc has six development wells and five exploration wells. In the first half 2006, Lapindo contributed 15% of Energi's total revenue.
According to Energi, total losses calculated at Lapindo's well blast that turned into a disaster could reach US$106 million. Based on Section VI of PSC agreement, Lapindo claimed it deserved cost recovery from government. Insurance coverage is reported at US$27.5 million.
So far, Lapindo got Rp109.2 billion funding from Energi's IPO and another Rp19.7 billion from a rights issue. On top of these, Lapindo also got loan from the US$120 million notes arranged by Merrill Lynch. It's not clear how much loan chanelled to Lapindo.
Malacca Brantas Finance BV issued the 3-year LIBOR plus 8%-8.5% loan to refinance US$50 million loan to PMA Investment Advisors Ltd and Bank Mandiri, while the remaining US$70 million to finance Malacca PSC and Brantas PSC.
"According to SPA, one of the requirements is to settle all third party debts. For that purpose, we're in the process to get financial resources," Energi told JSX.
So, it's clear, Energi could safely walk away from Lapindo disaster, leave it to government to recover all the cost incurred, and the environment for the unstoppable mudflow.

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