UPDATE: Bumi Consortium To Buy 14% Stake In Newmont's Local Unit
November 23 2009 - 8:48PM
Dow Jones News
A consortium led by PT Bumi Resources (BUMI.JK) signed an
agreement late Monday to buy an additional 14% stake in gold miner
PT Newmont Nusa Tenggara, or PTNNT, for $493.64 million.
Heriyadi Rahmat, a director of the consortium called PT Multi
Daerah Maju Bersaing, told reporters that the consortium is also
interested in buying an additional 7% stake in the unit of the
Denver-based Newmont Mining Corp. (NEM), which has to be offered to
local investors next year.
Monday's deal came after the Multi Daerah consortium last week
concluded a purchase of a 10% stake in PTNNT for $391 million.
Bumi Resources, which has major interest in coal mining, owns a
99% stake in PT Multicapital, which in turn owns a 75% stake in
Multi Daerah.
Analysts said Bumi could own 18% of PTNNT after the stake
purchase. Its ownership in PTNNT could even increase to 23.25% if
Multi Daerah succeeds in getting an additional 7% stake of
PTNNT.
Newmont and its minority partner Sumitomo Corp. (8053.TO) are
required by their contract with the Indonesian government to divest
a total 51% of PTNNT to local buyers by 2010.
Analysts expect PTNNT, through its Batu Hijau copper-gold mine,
to produce 206,385 metric tons of copper and 485,531 ounces of gold
this year.
Bumi last week sold $300 million in convertible bonds and plans
to issue another $300 million bonds later this year to finance its
business expansion plans.
Analysts believe the $600 million in new funds will be used to
help finance the acquisition of the PTNNT stakes.
"We see this (PTNNT acquisition) positively as we believe the
deal is value-accretive, adding to around IDR300 per share to
IDR475 per share of Bumi," CLSA said in its latest research.
CLSA said "there is further upside should another 7% stake in
PTNNT, to be divested next year, is secured."
CLSA upgraded Bumi to outperform after its acquisition of PTNNT,
with a target price of IDR3,375. Bumi's shares closed down 1.8% at
IDR2,750 on Monday.
-By Deden Sudrajat, contributing to Dow Jones Newswires; 62-21
39831277; I-Made.Sentana@dowjones.com