KIM ENG: Equity Daily

􀂃 Mining: Bumi Resources (BUMI.IJ) issued announcement that it plans to sell 75.1% of Bumi Resources Mineral (BRM) at total Rp17.51t to its parent company Bumi Plc. The selling price of Rp840 per share translates into 16.7% premium to the last closing price. EGM to seek shareholders’ approval will be held on 21
October 2011.
􀂃 New IPO: Solusi Tunas Pratama, an infrastructure services company in telecommunication sector, will conduct initial public offering of 100m shares (16.7% from outstanding shares). The company has appointed Ciptadana Securities as the lead
underwriter.

Bumi Resources (BUMI.IJ, HOLD): To sell 75.1% of the mining unit at Rp840/share
􀂃 Bumi Resources issued announcement that it plans to sell 75.1% of Bumi Resources Mineral (BRM) at total Rp17.51t to its parent company Bumi Plc. The selling price of Rp840 per share translates into 16.7% premium to the last closing price.
􀂃 EGM to seek shareholders’ approval will be held on 21 October 2011.

Analyst comment:
􀂃 The company has mentioned the plan earlier this year, as part of restructuring within the Bakrie Group’s mining business. 􀂃 To pay 75.1% stake in BRM, Bumi Plc (Vallar) will issue an unsubordinated and unsecured, US$2,006m convertible notes with 2% interest to Bumi Resources. The CB can be converted to maximum 107.7m common shares of Bumi Plc at price £11.8 a share starting from 40 days of issuance.
􀂃 Since this is non‐cash transaction, we do not see the proceeds from the transaction to help Bumi in its plan to reduce its debt. Unless Bumi can sell the CB to other parties, Bumi still have to find ways to pay US$600m first installment to CIC, payable in October 2011. As of June 2011, Bumi only has US$444m cash and available‐for‐sale financial assets.
􀂃 Earlier, the press reported that Bumi might sell the CB to CIC as part of debt settlement of US$1.9b loan, but CIC was reported not interested and prefers cash payment instead.
􀂃 We recommend HOLD with target price Rp3100, pegging the stock at 11.8x FY11 PER.


New IPO: Solusi Tunas Pratama
􀂃 Business activity : Infrastructure services in telecommunication sector.
􀂃 Nominal price : Rp100 per share.
􀂃 Offer price : n.a
􀂃 IPO shares : 100m shares (16.7% from outstanding shares). The company will allocate maximum 5% from IPO shares (new shares) to employees through MESA (Management and Employee Stock Allocation)program.
􀂃 The proceeds will be used for (35%) expansion of Base Transceiver Station
(BTS) in Jawa, Bali, Sumatera, (50%) for acquisition of companies which have Base Transceiver Station (BTS) in Jawa, Bali, and Sumatera, and (15%) for working capital.
􀂃 Effective date (tentative) : 29 September 2011.
􀂃 Offer periods (tentative) : 3‐5 October 2011.
􀂃 Listing in IDX (tentative) : 11 October 2011.
􀂃 Lead Underwriter : Ciptadana Securities (affiliated).


SOURCE: KIMENG EQUITY DAILY dated 19 September 2011