Insider Stories

Pefindo lowers Berlian Tanker to idSD

2012-02-15T15:56:00.000+07:00

PT Pemeringkat Efek Indonesia (Pefindo) lowered PT Berlian Laju Tanker Tbk’s (BLTA) corporate rating to idSD from idCCC after confirming that BLTA has not made the repayment on one of its offshore bank loans and its ship-lease obligations on their respective due dates.

Pefindo maintained idCCC ratings for the company’s bond III/2007 and bond IV/2009 (including the Bond IV/2009-B Series amounting to Rp150 billion due 28 May 2012), and also maintained the ratings of BLTA’s Sukuk Ijarah I/2007 and Sukuk Ijarah II/2009 at idCCC(sy) (including Sukuk Ijarah II/2009-A Series amounting to Rp45 billion due 28 May 2012).

The debt instrument ratings will be lowered to idD when the next respective dates for interest or principal payments are passed and the payments are not made.

Berlian Tanker is a shipping company, which focuses on shipment of liquid products (chemicals, oil, gas, and edible oil) throughout Asia, including Middle East, Europe, South and North America.

The company owns 40 chemical tankers (total capacity of 601,003 DWT/dead weight ton), 11 oil tankers (748,873 DWT), 15 gas tankers (146,224 DWT), 1 FPSO tanker (60,874 DWT) and 27 chartered vessels (691,914 DWT).

As of September 30, 2011, BLTA’s major shareholder was PT Tunggaladhi Baskara with 37.95% ownership while public held around 62% share.

Disclosure: No position at the stock mentioned above.

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Cikarang draws US$4.3 bio demand

2012-02-15T08:26:00.000+07:00

Investor is hunger to buy US$500 million bonds to be issued by PT Cikarang Listrindo. The total demand for the bonds surpassed US$4.3 billion or Rp38.7 trillion.
Cikarang's debts are to be the first from Indonesia to test the global market after the country's credit rating was improved by two rating agencies Moody's Investors Service and Fitch Ratings.
Barclays Plc and Credit Suisse Group are the arranger for the bonds sale, charging 6.95% coupon a year. Standard & Poor's Ratings Services (S&) yesterday said its BB- issue rating on the US$500 million 6.95% senior notes due 2019 by Listrindo Capital B.V. remains unchanged after the pricing. The notes are unconditionally and irrevocably guaranteed by PT Cikarang Listrindo (BB-/Stable/--).
Cikarang will use part of the notes proceeds to refinance a portion of its outstanding 2015 notes through a tender offer. The remaining proceeds will be used to partly fund a new coal-fired power plant and general corporate purposes.

Disclosure: No position at the stock mentioned above.

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Garuda signs MoU with Rolls Royce

2012-02-15T08:15:00.001+07:00

The state-controlled airlines PT Garuda Indonesia Tbk (GIAA) is in frenzy shopping. The airlines, which the shares price now still below the IPO level, announced a memorandum of understanding with Rolls Royce Plc on February 10.

The MoU is related with a purchase of engines for flight with A330 series and maintenance support for Trent 700 engine series.
In parallel with the MoU, Garuda Indonesia has entered purchase agreement with Bombardier of CRJ1000 NextGen of 6 fleets with option to add 18 fleets.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

2012-02-15T08:04:00.002+07:00

Storming off session lows, U.S. stocks landed virtually unchanged on Tuesday as Wall Street managed to mostly shrug off its latest batch of jitters about Greece and a disappointing retail sales report.

The Dow Jones Industrial Average, as quoted by foxbusiness.com, rose 4.24 points, or 0.03%, to 12878.28, the Standard & Poor's 500 slipped 1.27 points, or 0.09%, to 1350.50 and the Nasdaq Composite gained 0.44 points, or 0.02%, to 2931.83.

For the third day in a row, the global financial markets were swayed greatly by concerns about Europe's never ending sovereign debt crisis. While enthusiasm for Greece passing a painful austerity package helped send the Nasdaq Composite to 11-year highs on Monday, there were new signs that a bailout is anything but a done deal.

The Greek concerns combined with a weaker-than-expected report on retail sales in January to send the blue chips sinking as much as 80 points before staging a last-minute comeback. The late rally appeared to be sparked by a Greek conservative leader promising to deliver a commitment to international lenders on Wednesday, clearing up a hurdle to its bailout.

“The market has really weathered that intraday selloff with some degree buoyancy,” said Peter Kenny, managing director at Knight Capital Group. “The reasons to sell are not compelling. The reasons to hold are. That’s why the market’s bias is positive."

How about Indonesia stock market today? Bisnis Indonesia provides recommendations quoted from brokerages:

Panin Sekuritas

Pressure on Jakarta Composite Index (JCI) today may abate, while there is no positive sentiments that could boost the market. The index may move at support-resistance level of 3,924-3,982.

e-Trading Securities

The JCI today may move mixed with uptrend position. It may move within the range of 3,909-4,001. Several stocks to watch: ITMG, ANTM, and BUMI.

Disclosure: No position at the stock mentioned above.

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Bakrie, Samin Tan drop plan for shake-up

2012-02-15T00:15:00.002+07:00

Borneo Bumi Energi & Metal Pte Ltd, that is 51% controllled by Samin Tan, today finally decided to withdraw a request for an extraordinary general meeting, which was designed to oust several executives including Co-Chairman Nathaniel Rothschild and other directors of Bumi Plc.

"After very constructive discussions with Sir Julian Horn-Smith, Deputy Chairman and Senior Independent Director of Bumi Plc, and Lord Robin Renwick on behalf of the Independent Directors, we have concluded that the best interests of Bumi Plc and its shareholders will be served by withdrawing our request for an EGM," said Director Ken Allan at Borneo Bumi Energi in a press statement today.

The nominations of Samin Tan as Chairman, Scott Merrillees as Chief Financial Officer and Nalin Rathod as Chief Executive Officer, designed to strengthen the Bumi Plc Board, have received the support of theindependent directors via the discussions referred to above and will be dealt with by the Bumi Plc Board at its next meeting on 26th March 2012.
The nominations of two potential Iindependent Non-executive Directors will be dealt with at the next AGM, scheduled for 14th June 2012, when all directors and nominees will be considered for election or re-election to the Bumi Plc Board.

Disclosure: No position at the stock mentioned above.

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Rothschild venture Bumi holds talks

2012-02-14T09:19:00.002+07:00

Top directors at coal miner Bumi Plc will hold crisis talks in Jakarta on Tuesday, hoping to broker a boardroom deal barely a week after Indonesian shareholders said they planned to oust co-founder Nat Rothschild and others.

Investor Samin Tan and Indonesia's Bakrie Group, as quoted by Reuters, who together own 29.9 percent voting rights in Bumi, said earlier this month they were seeking to replace Rothschild, currently co-chairman, and other senior board members including James Campbell, the former head of Anglo American's coal division.
That announced, a bitter and unexpected blow to Rothschild, rattled investors in Bumi, has since knocked 16 percent off Bumi's shares and revived worries over governance at a company that owns some of Indonesia's richest coal mines and is one of the world's biggest thermal coal exporters.
City veteran Julian Horn-Smith and former diplomat Robin Renwick, two of the Bumi board directors the Indonesian shareholders did not try to eject, are due to hold talks with Tan and the Bakrie team, Tan's investment vehicle and sources close to the companies said.
Tan himself will be in London in the days that follow that, hoping to sell his vision for the company to key institutions.
A source close to Bumi denied reports that Tan's visit would also attempt to test market appetite for an additional share sale by Bumi, ostensibly to raise cash for investments in base metal miner PT Bumi Resources Minerals Tbk, which is majority owned by PT Bumi Resources Tbk, the coal miner in which Bumi Plc has a 29 percent stake.
"Bumi Plc has no plans to raise additional capital this year," the source said.
The talks between Horn-Smith, Renwick and representatives of the Bakries and Tan are aimed at hammering out a compromise, with the Indonesian contingent under pressure from Bumi's institutional investors, many of whom bought into the idea of a promising asset that would see its governance improved by the involvement of Rothschild and others, and its debt slashed.
Neither has happened, they complain, and fighting over the company's governance has become a potentially damaging sideshow.

"What is most important to us is how the company operates -- to manage the mines well and get rid of this debt burden. Anything that distracts from that, such as the ongoing public exchange between the various parties is just total pantomime which reflects badly on all concerned," said Ali Miremadi, a partner at Taube, Hodson and Stonex, a top 30 investor in Bumi.
"We would definitely prefer that Nat Rothschild stays, but frankly these squabbles between the various parties -- Nat, the Bakries and now Tan -- have been a massive distraction."
Bumi Plc is currently trading around 743.5 pence, over a third below the price at which it relisted last June, and at a discount to the sum of its parts.
"The people who invested in the first place invested (in Rothschild's original shell company, Vallar) on the basis of the deal that Nat was going to do. I think the deal has great strategic merit. It just hasn't been executed to plan yet," said analyst Richard Knights at Liberum in London.
"The step-up transactions didn't occur, and the company still only has 29 percent of PT Bumi. The story in PT Bumi is a very good one, if you can deleverage it."
Rothschild himself, who owns just under 12 percent of Bumi, is expected to be forced to sacrifice his role as chairman, but could remain on the board as part of a compromise deal. Rothschild's relationship with the Bakries, his one-time allies, soured in recent months, and the former hedge fund manager heightened tensions in November, when a frustrated letter sent to the chief executive of both Bumi Plc and Jakarta-listed PT Bumi was leaked to the press.
Under the proposals floated earlier this month, Tan would become chairman, alongside Indra Bakrie as co-chairman.
Top directors at coal miner Bumi Plc will hold crisis talks in Jakarta on Tuesday, hoping to broker a boardroom deal barely a week after Indonesian shareholders said they planned to oust co-founder Nat Rothschild and others.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

2012-02-14T08:55:00.002+07:00

Bouncing back from Friday’s rare retreat, U.S. stocks coasted to a higher close on Monday as a crucial Greek vote on austerity measures soothed the markets’ eurozone headache and Apple catapulted the Nasdaq Composite to new 11-year highs.

The Dow Jones Industrial Average, as quoted by foxbusiness.com, jumped 72.81 points, or 0.57%, to 12,874.04, the Standard & Poor's 500 climbed 9.13 points, or 0.68%, to 1351.77 and the Nasdaq Composite advanced 27.51 points, or 0.95%, to 2,931.39.

The latest buying binge on Wall Street adds to the markets' hot start to the year and leaves the blue chips within striking distance of the psychologically-important 14,000 level.

Without any major economic or earnings reports on the agenda, traders largely focused on Greece, which signed off on new austerity measures over the weekend, raising hopes Athens may avoid a disorderly bankruptcy in the near term. The austerity package had a requirement for Greece to receive a US$172 billion bailout from the European Union and International Monetary Fund.

Passage of the measures, which include deep spending cuts and a reduction of the minimum wage, triggered protests and then fiery confrontations with rioters overnight.

While the key vote was a necessary step to prevent a default and potentially calamitous bankruptcy, it doesn't appear to be the final chapter for Athens. Greece still faces a number of hurdles, including a meeting on Wednesday between eurozone finance ministers to vote on approving the bailout.

How about Indonesia stock market today? Bisnis Indonesia provides recommendations:

Reliance Securities:

Jakarta Composite Index (JCI) may move to the upper level of rectangle with a target level of 4,022. Several stocks that looks interesting: ASII, AISA, and INDY.

e-Trading Securities:

Today, the JCI may move within the range of 3,924-4,001. Several stocks to watch: BBRI, MAPI, and BUMI. Yesterday, the JCI rose 1.27% to 3,961.90.

Sinarmas Sekuritas:

Technically, the index today may move within the range of 3,950-4,020. Several stocks for day trading: BSDE, ARNA, and PGAS.

Minna Padi Investama:

The index today may rise with resistance level at 4,005. The opportunity to collect several blue chips is still open. Several stocks to watch: BMRI, HRUM, and BBNI.

Disclosure: No position at the stock mentioned above.

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Bakrie to issue Rp1 trillion bonds

2012-02-13T08:30:00.003+07:00

PT Bakrie&Brothers Tbk (BNBR) is seeking an opportunity to issue a Rp1 trillion bonds in the last quarter of this year.

Finance Director Eddy Soeparno, as quoted by Kontan daily today, the company will use the first quarter result to issue the bonds. "Soon, our financial statement last year will be published," he said.

According to him, BNBR will use the proceed to settle short term debts, including repurchase agreement transactions (repo). By end of September 2011, BNBR recorded a Rp410.97 billion

The company recorded repo debt to Mahakarya Modalindo of Rp151.08 billion. Recapital Securities of Rp130 billion, Panin Sekuritas of Rp30 billion, Buana Capital Securities of Rp25 billion, Sarijaya Permana Sekuritas of Rp20 billion, Sucorinvest Central Gani of Rp19.89 billion, Bina Artha Parama of Rp12 billion, and other parties of Rp23 billion.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

2012-02-13T08:01:00.001+07:00

Don’t look now, but Wall Street’s nagging eurozone headache is back. After 6 weeks of uncharacteristic calm and soaring stock prices, eurozone jitters re-emerged on Friday, sparking a rare triple-digit selloff on the Dow and setting off a spike in volatility

The culprit? Greece, as quoted by foxbusiness.com, which has incredibly been a thorn in the global market’s side for almost two years now.

“Investors quit thinking about Europe. It was a risk-on environment again for eight weeks, but now we’re kind of at a standstill,” said Stuart Freeman, chief equity strategist at Wells Fargo Advisors. “A lot of investors think this market may have moved a little ahead of itself.”

Investors’ risk appetite was stunted by the news overnight that the latest bailout of Greece may not be in the bag after all.

Reports that political turmoil in Athens could collapse a $172 billion rescue from the International Monetary Fund and European Union helped send the blue chips sinking as much as 145 points on Friday -- the largest intraday decline since January 13. If the benchmark index closes with a triple-digit loss, it would be its first for all of 2012, which started very strong thanks to bullish economic data and easing tensions in Europe.

So far this year, the largest one-day decline at the close has been just 74.2 points, which happened on January 27. Remarkably, prior to Friday, 20 of the 27 trading days this year saw the S&P 500 move less than 0.5% in either direction, according to Dan Greenhaus, chief global strategist at BTIG.

In a further sign of the rising concern, the VIX, which helps gauge market fear, soared as much as 11% Friday morning. While this measure remains at subdued levels compared with last year, Friday’s outburst still marks its biggest one-day increase in three months.

Likewise, the cost to insure the sovereign debt of a number of embattled eurozone countries climbed on Friday.

According to Markit, the cost to insure $10 million of Italian bonds jumped 7.1% to $392,000, while the cost to insure Spanish debt climbed 5.2% to $364,000.

The fear is that if Greece’s political parties fail to reach a deal on highly unpopular austerity measures, the IMF won’t release the latest tranche of bailout funds, triggering a disorderly default on March 20.

How about Indonesia stock market today? Bisnis Indonesia provides recommendations:

Reliance Securities:

Jakarta Composite Index (JCI) today may continue its drop as the lowest level broke 3,950 from the triangle pattern. The index is approaching support level of 3,893.

It is better for investor to take wait and see position until rebound pattern emerges. ADRO, ANTM, BBNI, INDF, and ITMG may furter lower.

e-Trading Securities:

Today, the JCI may move within the range of 3,857-3,948. Technically, the index may retreat and break support uptrend level.

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Abdi Andre bags Rp30 bio in Atlas sale

2012-02-12T16:37:00.001+07:00

Abdi Andre, founder and controlling shareholder of PT Atlas Resources Tbk (ARII), reported sale of 20 million shares in Atlas Resources at Rp1,500 a share.

In official statement filed to Indonesia Stock Exchange last week, Abdi Andre bagged Rp30 billion cash from the shares sale during a period of December 18 to December 24 2012.

In 2010 and 2009, Atlas Resources produced 1.25 million tons and 1.06 million tons coal. In the first four months of this year, the company produced 333,474 tons. Most production was contributed by its subsidiary dubbed PT Berau Bara Energi.
Atlas Resources owns 18 subsidiaries namely Berau Bara Energi, PT Diva Kencana Borneo, PT Hanson Energy, PT Aquela Pratama Indonesia, PT Optima Coal, PT Optima Persada Energi, PT Citra Global Artha, PT Papua Inti Energi, PT Kalibara Energi Pratama, PT Gorby Energi, PT Gorby Global Energi. PT Gorby Putra Utama, PT Anugrah Energi, PT Banyan Koalindo Lestari, PT Cipta Wanadana, PT Karya Manunggal, PT Musi Mitra Jaya, and PT Sriwijaya Bara Logistic.

Disclosure: No position at the stock mentioned above.

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S&P places BB for Indosat notes rating

2012-02-12T16:10:00.000+07:00

Standard & Poor's Ratings Services (S&P) said today that it had placed its BB long-term corporate credit rating on Indonesia-based telecom operator PT Indosat Tbk (ISAT) and the BB rating on the company's guaranteed senior unsecured notes on CreditWatch with positive implications.

At the same time, S&P placed the axBBB- ASEAN scale long-term rating on Indosat on CreditWatch with positive implications.

The CreditWatch action reflects our view that Indosat's liquidity position could benefit from the company's sale of 2,500 towers to PT Tower Bersama Infrastructure Tbk. (not rated).

"We expect Indosat to receive about US$350 million in upfront cash payment for the sale. We expect the company to use this cash to repay debt and fund capital expenditure."

Indosat will also receive a 5% stake in Tower Bersama's expanded capital, and up to US$113 million in potential deferred payment as a sale consideration.

Indosat has also signed a 10-year lease agreement for the towers that it has proposed to sell to Tower Bersama. "In addition to the proposed sale, Indosat has tied up credit facilities over the past six months. These factors should improve the company's liquidity," said Standard & Poor's credit analyst Mehul Sukkawala.

"The company also expects to cut costs and lower its capital expenditure with the tower sale. However, we do not expect Indosat's leverage to improve significantly due to the tower sale because we will factor in the present value of lease obligations as debt while assessing the company's financial performance."

S&P believes Indosat has "less than adequate" liquidity, as defined in its criteria. The company's sources of liquidity are likely to cover its uses of liquidity by about 1.1x in the next 12 months.

However, S&P believes that upfront cash proceeds of Rp3.15 trillion from the proposed sale would result in "adequate" liquidity for Indosat.

"We forecast the company's sources of liquidity at 1.5x its uses of liquidity over the next 12 months after factoring in the sale. We aim to resolve the CreditWatch action within the next two to three months, when the transaction is likely to be completed," said Mr. Sukkawala.

S&P will raise the rating by one notch following the completion of the tower sale because we expect the transaction to improve the company's liquidity.

According to Indosat, the deal is subject to approval by Tower Bersama's shareholders and consent from Indosat's bondholders.

"If the deal does not go through, we will review Indosat's liquidity management policy to determine any further rating action."

Disclosure: No position at the stock mentioned above.

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S&P downgrades Berlian Tanker to D

2012-02-12T16:03:00.001+07:00

Standard & Poor's Ratings Services (S&P) said today that it had lowered its long-term corporate credit rating on PT Berlian Laju Tanker Tbk (BLTA) to D from CC.

"We also lowered the issue rating on the US$400 million senior unsecured notes due 2014, issued by BLT Finance B.V., a wholly owned subsidiary of BLT, to D from C. BLTA guarantees the notes. At the same time, we removed the ratings from CreditWatch, where they were placed with negative implications on Jan. 30, 2012."

"The downgrade follows our confirmation that BLT has failed to make ship-lease payments to at least one company," said Standard & Poor's credit analyst Vishal Kulkarni.

"A failure to honor contractual financial obligation constitutes a default."

S&P believes Berlian Tanker is likely to fail to honor other financial obligations, such as interest payments and debt repayments, in days ahead.

"We will assess BLT's debt-servicing ability following a restructuring at the company."

Disclosure: No position at the stock mentioned above.

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Indonusa Agromulia buys Sawit Mas

2012-02-12T15:59:00.001+07:00

PT Indonusa Agromulia last week announced that the company has acquired majority stake in PT Sawit Mas Perkasa. Indonusa announced the stake takeover on February 11 2012. However, it has not declared the stake percentage and the takeover price.
Indonusa Agromulia was established in 2000, located in Muarabungo, Province Jambi, Indonesia. Until now, the company consistently supplies the rubber over the globe. The market spreads in Asia and spread in major cities in Indonesia. Total annual sales volume is estimated US$5 million-US$10 million.

Disclosure: No position at the stock mentioned above.

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Aero Catering Services eyes IPO in 4Q

2012-02-12T15:47:00.002+07:00

PT Aero Catering Services (ACS), a company under PT Garuda Indonesia Tbk (GIAA), is seeking an initial public offering (IPO) in the last quarter of this year.

Director Elisa Lumbantoruan at Garuda Indonesia said Garuda will discuss IPO with the management of PT Aerowisata Services as holding company of Aero Catering.

"If we want to fasten the IPO, it may be in the last quarter of 2012," he said as quoted by Bisnis Indonesia last week.

According to Elisa, there are two reasons to be considered by ACS such as preparation and the market situation. ACS will hold a due diligence in a bid to find out the readiness of the IPO.

Disclosure: No position at the stock mentioned above.

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BW Plantation secures Rp800 bio loan

2012-02-12T15:38:00.001+07:00

CPO player PT BW Plantation Tbk (BWPT) has secured a Rp800 billion loan facility from PT Bank Negara Indonesia Tbk (BNI).

Director Pointo Pratento at BW Plantation said the facility will be used by the company to underpin its business expansion such as new planting through subsidiaries and additional area.

"We have entered into loan facility agreement with BNI on February 8," he said on Friday last week in an official statement filed to Indonesia Stock Exchange.

The 8-year facility will charge a 10% interest a year. BW Plantation, that is controlled by Indonesian businessman Budiono Widodo, experienced a 21.4% increase in CPO production volume last year.

BW Plantation, led by Tjipto Widodo, son of Budiono Widodo, produced 110,771 tons last year from 91,255 tons a year earlier.

Fresh fruit bunch production also rose 15.3% to 458,217 tons last year from 397,528 tons in the previous year. BW Plantation scouting a 25% increase in CPO output production to 130,812 tons this year from an estimated figure of 104,650 tons last year.

Corporate Secretary Kelik Irwantono previously said the company is still unable to mention the detail figure of CPO production last year as it is gathering and calculating the data.

"This year will see a 130,812 tons of CPO output. We are optimistic to achieve the target," he said. In 2010, BW Plantation produced 91,000 tons.

The company, that is run by sons and daughter of Budiono Widodo via PT BW Investindo, PT Wahana Platinum Indonesia, and PT Mitra Energi Global, is currently construction a CPO processing plant in East Kalimantan wth production capacity of 60 tons of fresh fruit bunch (FFB). It will commercially operate the CPO plant in the first quarter of 2012 with 30 tons of FFB capacity in Central Kalimantan. The company requires Rp60 billion investment to construct the processing facility. To build the East Kalimantan processing plant, the company requires Rp120 billion investment from Bank Rakyat Indonesia.

BW Plantation has secured Rp1.3 trillion loan facility from Bank Rakyat Indonesia and Rp230 billion from Bank Negara Indonesia.

BW Investindo, that was previously dubbed PT Citra Prima Global, is owned by Tjipto Widodo, Phoebe Widodo, Sardjono Widodo, Hartono Widodo, and Tjong Njoek Fa.

BW Plantation owns seven operating subsidiaries dubbed PT Bumilanggeng Perdanatrada (BLP), PT Bumihutani Lestari (BHL), PT Adhiyaksa Darmasatya (ADS), PT Wana Catur Jaya Utama (WCJU), PT Sawit Sukses Sejahtera (SSS), PT Agrolestari Kencana Makmur (AKM), and PT Satria Manunggal Sejahtera (SMS).
Disclosure: No position at the stock mentioned above.

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Signal for Bakrie Telecom from S&P

2012-02-10T09:26:00.000+07:00

Standard & Poor's Ratings Services (S&P) said yesterday that it had lowered its long-term corporate credit rating on Indonesia-based limited mobility wireless operator PT Bakrie Telecom Tbk (BTEL) to CCC+ from B.
The outlook is negative. "We also lowered our rating on Bakrie Telecom Pte. Ltd.'s senior unsecured notes due 2015 to CCC+ from B. BTEL guarantees the notes.

S&P lowered the rating because the rating agency expects BTEL's liquidity to come under considerable pressure in the next 7 months.

Despite an increase in tariffs in September 2011, an improvement in the company's operating performance is likely to be lower than we expected in 2012.

S&P believes this could further strain BTEL's ability to make its lease payments, which amount to about Rp700 billion each year.

"We also anticipate that the company will not meet its interest coverage covenant for the year ended Dec. 31, 2011, on its local currency bonds. In addition, BTEL's weak operating performance makes it difficult for the company to raise funds to pay its local currency bonds of Rp650 billion that mature in September 2012.

"BTEL's operating performance for the quarter ended Dec. 31, 2011, is likely to have been weaker than our expectation for the previous 'B' rating," said Standard & Poor's credit analyst Mehul Sukkawala. "A higher-than-expected fall in voice and SMS traffic largely offsets the expected improvement from tariff hikes. We also expect the company's financial performance to be very weak in 2012."

'Weak' liquidity

S&P believes BTEL has 'weak' liquidity, as defined in our criteria. The company's liquidity sources are likely to cover liquidity uses by 0.6x in the next 12 months. We also expect that BTEL will breach its local currency bond covenant in two to three months.

"The negative outlook reflects our view that BTEL may not be able to undertake strategic measures by September 2012 to address its weak liquidity," said Mr. Sukkawala.

S&P could lower the rating if: (1) we expect the local currency bondholders to trigger acceleration of payment because of the covenant breach; or (2) BTEL does not raise additional funds by May 2012 to strengthen its liquidity position."We could revise the outlook to positive or raise the rating if BTEL arranges for adequate funds to meet both its upcoming rupiah-denominated bond repayment and its ongoing finance lease payments. This assumes that the company's EBITDA interest coverage is more than 1.5x and adequate headroom is restored within its debt facility financial covenants."

Disclosure: No position at the stock mentioned above.

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Yawadwipa, Samin Tan & Bumi Plc

2012-02-10T09:18:00.001+07:00

Yawadwipa Companies has strongly provided a back-up for Samin Tan, a partner of Nirwan Bakrie in Bumi Plc.
In an official statement widely distributed by Yawadwipa yesterday, the company, which has bid PT Bank Mutiara Tbk, previously known PT Bank Century Tbk, at a consideration price of US$750 million as well.
Yawadwipa, which is led by CEO and Co-Founder C. Christopher Holm with Presetyo Singgih as COO. Yawadwipa is operated by a small group of executives (partners). Chad Christopher is also acting as chairman of the Investment Committee of the Java Fund.
"As stated previously by us, we are highly interested as investors in the natural resource sector and were strong supporters of Samin Tan and his management team at Borneo Lumbung Energi," Yawadwipa said.
Despite the share price reduction that has occurred since the transaction, in part due to declines in commodity prices, we were advocates of the transaction with Bumi and believe strongly in the strategic merits of the deal, both in the intermediate and long-term. We are confident in the core operating teams and
the prospects for the underlying assets.
"Nonetheless, we have become increasingly concerned with the effects of the current 'noise' at the Bumi board level, particularly given broader market volatility and global economic uncertainty. We view this friction, whether purely in the name of efficiency or otherwise as counterproductive to the interests of Bumi shareholders especially during a time post-transaction when extreme coordination and cooperation is required. It is unfortunate that such matters needed to be made public and could not be handled in private, though the precedent was set by a certain Bumi Plc insider in November during the period prior to consummation of the Borneo transaction.

"The November comments,whether valid or not, were recklessly and carelessly delivered via a public forum. As a private investor, this may well have been tolerable behavior, but as an insider and board member, such delivery, in our opinion, was wholly unacceptable. If an employee did this, such individual most certainly would have been fired on the spot."

In November, Nathaniel Rothschild, the founder and shareholders of Bumi Plc, has criticized the management and corporate governance at the Indonesian coal company he is trying to transform into a top-tier global miner.In a letter seen by the Financial Times, Rothschild called for a “radical cleaning up” of PT Bumi Resources Tbk, the Jakarta affiliate of London-listed Bumi plc and one of the world’s biggest coal miners.

The letter has raised tensions between the aristocratic billionaire and his Indonesian co-investors, the Bakrie family, who are Bumi’s largest shareholders.

"As a prospective shareholder of Bumi, we now seek an end to the public drama. We find the proposals of Samin Tan and Bakrie to be wholly consistent with streamlining an organization that has transformed itself following the strategic merger and consistent with good corporate governance."

Yawadwipa will immediately take whatever steps necessary to support Samin Tan's agenda, including but not limited to acquiring sufficient voting shares of Bumi so as to assure the passage of the agenda.

Regarding the statement above, bold words, it seems that Yawadwipa is just a potential investor who is interested with natural resources and has clearly declared to support Samin Tan and Bakrie.

However, there is no detail information how much stake Yawadwipa controls in Bumi Plc. The statement is unclear to reveal the way how to support Samin Tan and Bakrie family. Yawadwipa is seeking to acquire sufficient voting shares to assure the passage of the agenda.

A relevant question, is Yawadwipa serious with the statement above? In fact, they don't declare Bumi Plc shares they own right now. Without evidence and fact, anyone in the street can claim to be a supporter for Samin Tan and Bakrie. What do you think?

Who is Prasetyo Singgih?

Prasetyo Singgih is vice chairman of Indonesian Chamber of Commerce and Industry for China Committe.
He is also a politician and acting as Head of Department for Justice and Human Rights in Golkar Party, led by Aburizal Bakrie, brother of Nirwan Darmawan Bakrie.

Disclosure: No position at the stock mentioned above.

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Tower under review for downgrade

2012-02-09T15:09:00.001+07:00

Moody's Investors Service has today placed the Ba2 corporate family rating of PT Tower Bersama Infrastructure Tbk (TBIG) under review for possible downgrade.
This follows the announcement made by PT Indosat Tbk (ISAT), rated Ba1 stable, that it has signed an agreement with TBIG for TBIG to purchase 2,500 of its telecommunications towers. The total upfront consideration is US$406 million of which approximately US$350 million will be paid in cash and the remainder will be in the form of newly issued shares in TBI equivalent to 5% of the enlarged equity base.
Indosat, as the anchor tenant, will lease back the towers from TBI for a period of 10 years at market rates. There is also the potential for a further earn out provision equivalent to some US$113 million over the life of the 10 year lease on the towers to be paid by TBIG to Indosat.
For TBIG the deal should further enhance its overall tenant quality and Moody's estimates that the Tier One tenancy ratio, being revenues attributable to Indosat, PT Telekomunikasi Indonesia (Baa1 stable), PT Telekomunikasi Sellular (Baa1 stable), and XL Axiata (Ba1 stable), will increase to approximately 70% from the current 64%.
In addition, TBIG will have the potential to build collocations on the 2,500 towers which will generate additional revenues.
The addition of these towers should catapult TBI into being the single largest independent tower provider in Indonesia, a position from which it should benefit given the growing number of collocations and increased acceptance of tower sharing by telecommunications operators in Indonesia.

Notwithstanding these benefits, Moody's will need to consider how TBIG plans on funding the acquisition as given the size of the deal there could be a substantial deterioration in leverage metrics.
This also represents the largest acquisition, in terms of number of towers, contemplated by TBI and Moody's will also consider its ability to integrate and successfully manage those assets as well as grow the tenancy ratio.

Given the high level of cash flow visibility surrounding the acquisition, the expected growth in collocations and associated ability to delever, it is Moody's view that any downgrade in TBIG's rating will be no more than one notch and, depending on the nature of funding, could be contained at the Ba2 rating level.

The acquisition is still subject to TBIG shareholder approvals as well as the consent of Indosat's creditors and could therefore be a period of months before financial close is reached.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

2012-02-09T09:47:00.002+07:00

Stocks drifted a smidgeon higher, as investors awaited an agreement among Greek politicians on reforms ahead of the country's second international bailout.

The Dow Jones Industrial Average, as quoted by WSJ.com, inched up 5.75 points, or less than 0.1%, to 12883.95, a high that was last seen May 19, 2008. The Standard & Poor's 500-stock index gained 2.91 points, or 0.2%, at 1349.96, while the Nasdaq Composite rose 11.78 points, or 0.4%, to 2915.86.

Energy stocks dragged the broader market lower, as crude-oil prices pulled back from morning gains. Exxon Mobil fell 0.6%. Financial and technology stocks offset some of the declines. Bank of America gained 3.6% to lead the Dow components, while Hewlett-Packard rose 1.8%.

Investors kept a close watch on developments in Europe, after The Wall Street Journal reported the European Central Bank, one of Greece's largest creditors, agreed to include its bonds in the debt restructuring.

What about Indonesia stock marker today? Bisnis Indonesia provides recommendations:

Panin Sekuritas:

Jakarta Composite Index (JCI) today may volatile with uptrend position. External sentiments could pose catalyst for the JCI today. The support-resistance level is 3,962-4,005. Top picksL TINS, INDF, SMGR, BMRI, and BBNI.

e-Trading Securities:

The JCI may move within the range of 3,963-4,040 with uptrend possibility. Several stocks to watch: GJTL, INTP, and INDF.

Disclosure: No position at the stock mentioned above.

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Kiki Barki buys more Harum Energy

2012-02-09T00:36:00.000+07:00

PT Karunia Bara Perkasa, a company that is controlled by Indonesian businessman Kiki Barki, announced a 2 million shares purchase in coal mining company PT Harum Energy Tbk (HRUM).

Karunia Bara Perkasa bought those shares on January 16 as an investment. However, Karunia Bara has not declared the price of the purchase. Post the transaction, Karunia Bara controls 70.24% stake in Harum Energy or 1.89 billion shares.

Disclosure: No position at the stock mentioned above.

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Resource Alam buys 28,521ha concessions

2012-02-09T00:26:00.000+07:00

PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Kaltim Mineral, PT Jaya Mineral, and PT Tambang Mulia for a total value of US$6.25 million.
Resource Alam also agreed to buy 75% interest PT Chaido Mega Mineral for Rp15 billion.
Kaltim Mineral, Jaya Mineral, and Tambang Mulia are developing green-field projects in Kutai Timur, East Kalimantan. Each company is holding a coal mining concession, all granted in 2010. The three concessions cover a combined adjoining area of 23,521 hectares. Production is expected to commence in 2015.
Chaido is a coal mining company in Kutai Kertanegara, East Kalimantan. It holds a coal concession, granted in 2009, in a total area of 5,000 hectares.

The company targets Chaido to commence operation by 2013.
Resource Alam has performed due diligence survey and considers all the concessions to have prospective open-cut mining potential.
The company has commissioned PT Britmindo, a reputable mining consultant to conduct intensive geological studies on some of the above concessions.

Disclosure: No position at the stock mentioned above.

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Bumi secures US$600 million loan

2012-02-08T23:51:00.002+07:00

Indonesia's largest coal exporter PT Bumi Resources Tbk (BUMI), parent company of KPC, Arutmin Indonesia, and Bumi Resources Minerals, has secured a US$600 million loan facility from China Development Bank Corporation.

In an official statement filed to Indonesia Stock Exchange (IDX), the 4-year facility, charging a 6.7% above Libor a year, will be used by Bumi, a subsidiary of London-based Bumi Plc, to refinance the previous short term facility obtained from Bank of America-Merrill Lynch, Barclays Capital, and JPMorgan.

Disclosure: No position at the stock mentioned above.

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Indosat sells towers to Tower Bersama

2012-02-08T17:12:00.000+07:00

Indonesia's second largest cellular operator by subscribers PT Indosat Tbk has entered a sale and leased agreement of 2,500 towers worth US$519 million with PT Tower Bersama Infrastructure Tbk (TBIG) and its subsidiary PT Solusi Menara Indonesia.

In an official statement filed to Indonesia Stock Exchange today, the 2,500 towers are counting 25% of Indosat's total towers. The payment is consisting of downpayment of US$406 million and differed payment of US$113 million.

The downpayment will be done by Tower Bersama by a combination of cash and new shares issuance as much as 5% of total shares.

Indosat has agreed to lease the towers for 10 years at the market price.

Disclosure: No position at the stock mentioned above.

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Stock recommendations today

2012-02-08T09:02:00.000+07:00

The markets shed early losses and closed in the green as traders grew more hopeful Greece may be able to reach a deal with international creditors and stave off a potentially damaging default.

The Dow Jones Industrial Average rose 33.1 points, or 0.26%, to 12878, the S&P 500 gained 2.7 points, or 0.2%, to 1347 and the Nasdaq Composite climbed 2.1 points, or 0.07%, to 2904.

With very little in the way of economic news on the day, traders were focused on developments in Greece and a smattering of corporate news.
How about Indonesia stock market today? Bisnis Indonesia provides recommendations:

e-Trading Securities:

Jakarta Composite Index (JCI) may move and tend to lower within the range of 3,909-3,992. Several stocks to watch: BMRI, BBNI, and INDY.

Panin Sekuritas:

Pressure on the JCI may abate, while the index is estimated to be mixed within the range of support-resistance level of 3,934-3,977.

Sinarmas Sekuritas:

Technically, the JCI today may decrease within the range of 3,900-3,985. Several stocks for day trading: AKRA, MYOR, ADRO, and BSDE.

Minna Padi Investama:

Today, the JCI may volatile with a resistance level at 3,994. Buy on weakness is open for blue chips. Several stocks to watch: ASII, BMRI, and PTBA.

Disclosure: No position at the stock mentioned above.

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BW Plantation FY11 CPO output up 21.4%

2012-02-07T17:22:00.000+07:00

CPO player PT BW Plantation Tbk (BWPT), that is controlled by Indonesian businessman Budiono Widodo, experienced a 21.4% increase in CPO production volume last year.

BW Plantation, that is led by Tjipto Widodo, son of Budiono Widodo, produced 110,771 tons last year from 91,255 tons a year earlier.

Corporate Secretary Kelik Irwantono previously said the company is still unable to mention the detail figure of CPO production last year as it is gathering and calculating the data.

"This year will see a 130,812 tons of CPO output. We are optimistic to achieve the target," he said. In 2010, BW Plantation produced 91,000 tons.

BW Plantation has secured Rp1.3 trillion loan facility from Bank Rakyat Indonesia and Rp230 billion from Bank Negara Indonesia.

BW Investindo, that was previously dubbed PT Citra Prima Global, is owned by Tjipto Widodo, Phoebe Widodo, Sardjono Widodo, Hartono Widodo, and Tjong Njoek Fa.

Disclosure: No position at the stock mentioned above.

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