Source: Humas BNBR | 02 Jun 2016

The Extraordinary General Meeting of Shareholders (EGMS) of PT Bakrie & Brothers Tbk (“BNBR” or “Company”) held in Jakarta on Thursday (2/6) has approved the Company’s plan to doing right issue (Penambahan Modal Tanpa Hak Memesan Efek Terlebih Dahulu/PMTHMETD) ). With this agreement, BNBR has been effective in restructuring existing debts by converting them into share capital. Meanwhile, at the BNBR Annual General Meeting held on the same day, shareholders gave approval to the Company not to distribute dividends to shareholders.

“Yes, right, with the approval of the EGMS earlier, the Company will immediately issue the Mandatory Conversion Bonds worth Rp.990,692,339,000,” Bobby Gafur Umar, Director of BNBR, told reporters after the AGM. Explained by Bobby, the steps taken by the Company in carrying out the restructuring plan for the Company’s debts were carried out in accordance with the provisions on The Rights Issue.

Bobby explained, taking into account the negative net working capital of the Company as of March 31, 2016, which was negative Rp 9,010,156,514,000 as a result of the cumulation of several large losses in the past and total liabilities that had exceeded 80% of the Company’s assets amounting to 141% , by taking into account Regulation in POJK No.38 Article 3, the Company has finalized the plan to issue the Obligatory Conversion Bonds (OWK) in the amount of Rp 990,692,339,000. “The method will be converted into the Company’s New Shares,” Bobby said.

BNBR Finance Director, A. Amri Aswono Putro added, OWK that will be converted into the Company’s New Shares of 19,813,846,780 shares or 17.45% of the Company’s issued and fully paid capital. “The Transaction Plan is a Material Transaction, which is excluded as referred to in Bapepam-LK Regulation No. IX.E.2 and not an Affiliated Transaction or Transaction that contains a conflict of interest as referred to in Bapepam-LK Regulation IX.E.1, “Amri said, adding that the OWK must be converted into 19,813,846,780 shares of the Company’s New Shares, with an exercise price of Rp 50 per share.

Benefits for the Company According to Bobby Gafur Umar, this corporate action will bring benefits to the Company and other stakeholders. “Later we will see, with the implementation of this Transaction Plan, there will be improvements in the Company’s equity. The Company’s equity will increase to negative Rp 2,848,119,441,000 due to the implementation of the conversion of OWK transactions into the Company’s equity, “he said. In addition to the Company’s short-term liabilities, there was a decrease of Rp 990,692,339,000 to Rp 11,173,283,089,000 or decreased by 8.14%.

Debt reduction accompanied by an increase in equity is also expected to be able to improve the ratio of the Company’s debt to the Company’s assets from before the Proposed Transaction, i.e. from 1.41 times to 1.31 times. “Not only that, with the implementation of the Transaction Plan, the Company is expected to reduce the potential interest expense per year by approximately Rp.85.85 billion. Surely this has greatly helped the Company’s financial condition, “Bobby said.

Added by A.Amri Aswono Putro, the Company will also reap many other benefits from this Transaction Plan. “It is clear, this Transaction Plan will strengthen the Company’s capital structure. There will be a reduction in debt as well as additional shares, and this will help the Company to have a healthier, more solid and flexible debt to equity ratio, “Amri explained. In addition, the Company’s financial burden will also be reduced, which in turn will increase profitability and strengthen the Company’s cash flow structure in the future, due to the decrease in principal.

BNBR Projects On this occasion, Bobby Gafur Umar also explained the development and progress of the construction of a number of projects in the infrastructure and manufacturing sectors that are being worked on by the Company. The Company’s three business units that are engaged in the automotive component industry, building materials and metal fabrication and construction, namely PT Bakrie Autoparts, PT Bakrie Building Industries and PT Bakrie Metal Industries, are currently doing business development in their respective business lines.

“PT Bakrie Autoparts is increasing production capacity through modernizing production facilities; product portfolio expansion with higher margins. PT Bakrie Building Industries, is expanding its product portfolio with high value added products; expanding the distribution network, so as to get closer to consumers. While PT Bakrie Metal Industries is aggressively adding product variants through the establishment of a coating plant and metal services laboratory; and the expansion of the non-oil and gas market, “Bobby Gafur Umar explained.

In the infrastructure sector, a number of the Company’s business units are also involved in several strategic infrastructure projects. For example, in collaboration with PT Perusahaan Gas Negara Tbk (PGN), the Company is working on the Kalija 1 gas pipeline project, which since August last year has started to flow gas from the Kepodang field (Petronas’s Muriah gas field) to the Tambak Lorok PLTG, 106 mmbtu gas per day. In the toll road infrastructure sector, in collaboration with PT Waskita Toll Road (a subsidiary of PT Waskita Karya Tbk), the Company is working on the construction of the Cimanggis-Cibitung toll road. “The first phase has begun in September 2015, and the construction process at the Cimanggis interchange and section one over three kilometers is currently underway,” Bobby said.

In addition, the Company together with YTL Jawa Energy BV (a subsidiary of YTL Corporation Berhad), the Company is also working on the Tanjung Jati A power plant project with a capacity of 2x660MW. “We have signed the PPA in December 2015, and are now in the process of investment funding and construction preparation,” Bobby added.

For further information, contact:
Media Relations: Bayu Nimpuno
Head of Corporate Communications
bayu.nimpuno@bakrie.co.id

Investor Relations: Indra Ginting
Chief Investor Relations Officer
indra.ginting@bakrie.co.id

or visit www.bakrie-brothers.com