Bakrie, Credit Suisse & Danatama,
This is the most active trio in Indonesia Stock Exchange
(IDX) in the past five years. They brought PT Bumi Resources (BUMI)
Tbk, the crown jewel of Bakrie Group, up to the sky with 570% stock
price jump last year. BUMI once crowned as the largest company at IDX by
market cap (US$17.5 billion). Their actions raised Bakrie Group to a
US$30 billion group four months ago.
But on October 6, six Bakrie-related stocks crashed up
to 40% which triggered automatic rejections from the trading system..
Today, the trading of these shares suspended. "Without trading
halt, BUMI may fall to Rp1,000," one investor said.
"It's not about fundamentals. These companies are
mainly good in their fundamentals, with Energi Mega Persada (ENRG) is
probably an exception. Liquidity is the main issue here. You may
believe the shares are cheap already, but only if you have money to buy
them or to have someone provides you with financing. This is the
problem," another investor said.
"We have heard that Bakrie family has been
searching all over the world for financing to refinance short-term
loans and release the shares pledged as collateral. But it's difficult
to get US$1.4 billion to refinance Bakrie & Brothers (BNBR)
short-term loans to Odickson Finance, JP Morgan, and ICICI Bank,"
one investment banker said.
"We heard that ICICI Bank has yet to trigger
default on sharp decline of the collateral's value. But we heard JP
Morgan might trigger the default," another investment banker said.
Everybody needs cash and fund managers normally offload
the most liquid stocks such as BUMI first. Imagine what will happen if
that would happen.
The only financial institution willing to HELP Bakrie is
Credit Suisse. The company has just provided US$50 million working
capital facility to BUMI. Credit Suisse has also been reportedly
refinanced loans of ENRG. Credit Suisse also provided US$375 million
facility to BUMI for the acquisition of Herald Resources. BUMI acquired
Herald at A$2.85/share, but on Oct 6, it's dropped to A$1.1. Credit
Suisse also provided two other facilities in April with total
outstanding of US$165 million.
Combined with the latest facility, Credit Suisse's
outstanding facilities at BUMI alone reached US$540 million.
Other recent facility provided by Credit Suisse is
US$450 million loan to ENRG. Last year, Credit Suisse also signed
US$650 million facility for Bakrie's toll road projects.
"I think Credit Suisse is too deeply involved in
the Bakrie Group and the bank has limited option other than preventing
it from falling. Too big to fail," one senior analyst said.
Credit Suisse and Danatama Makmur were stand-by buyers
of Bakrie & Brothers (BNBR) US$5 billion rights issue early this
year. Credit Suisse also arranged US$147 million loan for Bakrie
Telecom (BTEL) late last year. BTEL's market cap crashed 65% this year
despite claims early this year of EPS three times higher in the coming
years.
But Danatama Makmur, Credit Suisse's tandem in
Bakrie-related maneuvers, has started to feel the heat of liquidity
crunch. The brokerage firm is being examined by stock market authority
over a report of default in stocks settlement scheduled on Tuesday,
October 7 at 1PM. IDX suspended Danatama's trading activity on Tuesday,
some said due to over the limit transactions
IDX CEO Erry Firmansyah declined to announce the results
of a meeting on Danatama on Tuesday. But some pointed to Danatama's
active purchase of Bakrie-related stocks in the past 24 days. Danatama
is the appointed broker for BUMI's shares buyback program.
Well, things go up should eventually come down! We will
see whether the Three Musketeers will survive the recent turmoil.
RUMORS:
1) BUMI will divest 10% of KPC and Arutmin to Tata (
India ).
2) Limitless will acquire shares of Bakrieland (ELTY)
for US$100 million.
3) Binladin Group will acquire BNBR shares for US$300
million.
4) Binladin Group will acquire ENRG
5) Bakrie Family will let go one of the companies
"But I think these are mainly PR strategy to boost
the share prices," one cynical investor said. (Source Indo Bloger)
