Bakrieland pays US$29m debt, avoids default

JAKARTA: Indonesian property firm PT Bakrieland Development has obtained last-minute funding to redeem a US$29 million (RM90.16 million) bond, avoiding default in the latest of a series of financial troubles to befall the Bakrie Group conglomerate.

Shares in Bakrieland were suspended on Monday by the stock exchange authority after it failed to redeem the bond on March 8 with Indonesian Central Securities Depository (KSEI), a custodian agency for capital market transactions.

The debt, which matured on Monday, and all interest due have been paid, the company said late on Monday.

KSEI will not be able to pay bondholders until today, however, missing the repayment date by one day due to a public holiday here yesterday.

Bakrieland, one of the Bakrie Group's main units, has agreed to sell its toll road unit and one of its resort assets to MNC Group as it aims to reduce its debt by more than US$200 million in 2013. The deal has yet to be sealed.

Bakrieland is 4.6 trillion rupiah in debt and more than one-quarter of this will fall due in 2013.

"We will assign a 'default' rating if the company could not fulfil the bond repayment (by the time) the grace period - 10 working days - elapses, or even earlier if we are certain that the company will not be able to repay the bond," said Vonny Widjaja, an analyst at domestic ratings agency PT Pemeringkat Efek Indonesia (Pefindo).

The company's current CCC rating, assigned on February 28, reflected its very weak capacity to repay the Bond, Vonny said.

The Bakrie Group, founded in 1942 by Sumatran businessman Achmad Bakrie to trade local commodities such as cocoa and coffee, is known for acquisitions funded through debt. Reuters