Bakrie & Brothers (BNBR, Rp50) , Bumi Resources (BUMI, Rp1,490)

Panax to develop geothermal projects with Bakrie Power Panax Geothermal Ltd., an Australian project developer, agreed with Bakrie Power to establish geothermal plants in Indonesia. The joint venture accord replaces a memorandum of understanding between the two companies signed in June 2010, Panax said in a statement on Aug. 16. Bakrie Power is
a subsidiary of Bakrie & Brothers. The agreement covers geothermal project areas that have already been awarded to Bakrie and areas for which Bakrie has already bid in Indonesia. It also includes geothermal areas that the two
companies will jointly identify as suitable for geothermal development, Panax said. The companies will initially develop the 30MW Sokoria Project located on Flores Island. Panax will have a 45% stake. Bakrie won a tender in
September 2009 to develop the Sokoria geothermal field at an electricity tariff of US$12.5cents per kWh. Panax and Bakrie will also supply 25MW of baseload geothermal power from existing geothermal resources to Dairi
Prima Minerals’ planned underground zinc and lead mine in northern Sumatra. Panax will hold a 51% stake in this project. Dairi Prima Minerals, a subsidiary of Bumi Resources, will buy electricity at US$15cents per kWh for the first 8 years, starting from late 2012, and US$12.5cents per kWh subsequently. – Bloomberg

Bank Negara Indonesia (BBNI, Rp3,000)

Green-shoe shares priced at Rp2,900 a share
The government finally set the price for Bank Negara Indonesia's green-shoe shares at Rp2,900 a share. About 70% of the green-shoe shares will be released to domestic investors and the remaining 30% is offered to foreign investors. Four local pension funds have been the largest buyers, they are, pension funds of Bank Indonesia, Jamsostek, Perkebunan, as well as Pertamina. Meanwhile, the foreign investors that become the largest buyers of the lender's greenshoe stocks are Invesco Hong Kong Ltd and Fidelity Investment Ltd. The Minister of State Enterprises Mustafa Abubakar said the
price actually can reach Rp3,000 a share. But if the government offers higher price, then the foreign investors will be the most potential buyers. The government wants to prioritize the domestic investors for this divestment.
With the price set at Rp2,900 per share, the stocks will have 3.93x oversubscribed. Meanwhile, if the price is set at Rp3,000, the stocks will be 1.36x oversubscribed. – Bisnis Indonesia

Indocement Tunggal Prakarsa (INTP, Rp16,150)

Cirebon-based new cement mill completed
Indonesia’s second largest cement producer, Indocement Tunggal Prakarsa, said it had its new cement mill with capacity of 1.5mn tons in Cirebon, West Java, completed. It may operate the mill on August or at the latest after Aidil Fitri holidays. The company may also plan to start building a new cement plant on 2H10, local newspaper reported. Indocement may allocate US$75mn for capital expenditure in 2010, the report said citing the company’s Corporate Secretary Dani Handajani. – Bisnis Indonesia, Investor Daily

Aneka Tambang (ANTM, Rp2,100)

Antam may invest US$600mn for nickel projects State-owned multi mineral producer Aneka Tambang or Antam may prepare
US$600mn for initial stage of its nickel project in Halmahera, North Maluku, while the project may cost US$1.2bn in total, local newspaper reported without citing any source. Antam is yet to decide potential partner for such project, an unnamed source told local newspaper. – Investor Daily

Bumi Resources (BUMI, Rp1,660)

Mulling over 7% stake in Newmont Nusa Tenggara Bumi Resources via its joint venture Multi Daerah Bersaing may add 7%
stake in gold and copper mine Newmont Nusa Tenggara (NNT) as the company is still following the process of the share sales. NNT foreign shareholders had offered 7% divestment stake at US$444.08mn to the Government of Indonesia, higher than last year’s 7% divestment stake which worth US$246.8mn. – Investor Daily

Bank Negara Indonesia (BBNI, Rp3,000)

Green-shoe shares to be sold at Rp2,900 each The government will start offering 473.89mn green-shoe shares of Bank
Negara Indonesia this week helped by Bahana Securities, Mandiri Sekuritas, Danareksa Sekuritas, and MacQuairie. The shares will be offered at a minimum price of Rp2,900 each. – Bisnis Indonesia

Bank Mandiri (BMRI, Rp5,900)

To finalize the acquisition process of an insurance company Bank Mandiri will finalize the acquisition process of another insurance company this year. The bank has not disclosed the identity of the target. Currently, Bank Mandiri has 51% stake of a life insurance company AXA Mandiri Financial Services, a joint venture with AXA Financial. – Bisnis
Indonesia

Unilever Indonesia (UNVR, Rp16,600) , SMART (SMAR, Rp3,500)

Nestle, Unilever to hold off on buying CPO from Sinar Mas Group Nestle SA, the world's biggest food maker, and Unilever will hold off on resuming palm-oil purchases from Sinar Mas Group as they look at the Indonesian company's assertions that inspectors cleared it of destroying rainforests. Nestle will base any decision on buying Sinar Mas-produced palm oil on internal guidelines, the Vevey, Switzerland-based manufacturer said in a statement. Sinar Mas's Golden Agri-Resources, subsidiary company may win back Unilever as a customer if it seeks certification from Roundtable on Sustainable Palm Oil and gives planning details for any plantation development, the Anglo-Dutch company said separately. - Bloomberg

Capacity upgrade at Astra Daihatsu Motor may cost Rp1tn

Astra International (ASII, Rp48,750)

Conglomerate Astra International may spend Rp1tn in a bid to increase production capacity at its joint venture Astra Daihatsu Motor from 280k units to 400k units, local newspaper reported. This will be part of the group’s FY10 projected capital expenditure of Rp7.5tn-8.0tn, the report said. Capital expenditure for mining and United Tractor will be Rp4tn, agriculture will be Rp1.5tn, and the rest went for automotive, citing Chief Corporate Communication Arief Istanto. – Bisnis Indonesia

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Newmont Nusa Tenggara's production unaffected as strike escalates , Bumi Resources (BUMI, Rp1,720)

Newmont Mining Corp., the U.S. largest gold producer, said production at its Batu  Hijau-based  gold and copper mines of Newmont Nusa Tenggara in Indonesia remained unaffected even as more workers joined a strike. About 500  employees  stopped work on the second day of the strike, Kasan Mulyono, a spokesman at Newmont Nusa Tenggara, said. As many as 300 workers had downed tools at midnight two days ago. The workers are planning to strike until Aug. 10, he said. “Newmont and the workers have yet to resume talks and we’re trying to seek alternative  solutions  to  settle  the overtime issue,” Mulyono said, without elaborating. An update on  the strike will be released later, he added. Newmont Nusa Tenggara is partly owned by a  venture  belonging to Bumi Resources and three local administrations in West Nusa Tenggara. – Bloomberg

Seeking partnership with CIC, TB Bukit Asam (PTBA, Rp16,300)

State-owned coal miner TB Bukit Asam said it may  seek  opportunity  from China Investment Corporation (CIC) in financing several projects, particularly in Muara Enim, South Sumatera the local newspaper reported citing Minister of State-Owned Enterprises Mustafa Abubakar saying CIC may invest US$2bn  in three state-owned companies, including TB Bukit Asam. However, the company is yet to meet CIC to negotiate such cooperation. TB Bukit  Asam  currently  has  US$1.5bn railways project of Bukit Asam Transpacific Railways that may need financings from China-based banks, the report said. – Investor Daily

Berau Coal Energy (Non Listed)

IPO price may be set at Rp400, borrowed US$400mn from seven banks  The shares of Berau Coal Energy, the holding company that controls Berau Coal,  may  be  floated at the highest price range of between Rp300 and Rp400  per  share following high local demand, local newspaper reported. There  has  been  oversubscription of four times at the strike price (for local investors), citing Vicky Ganda Saputra, an official at Danatama Makmur, the securities  company  that  underwrites the IPO of Berau Coal Energy. Separately,  Bloomberg news reported that Berau Coal Energy borrowed US$400mn  from  seven banks to refinance debt, according to a person familiar with the matter. The facility comprises a US$300mn  term  loan with an average life of 2.65 years and a US$100mn term loan with an average life
of 4.5  years,  the person  said, asking not to be identified as the details are private. The US$300mn loan pays an all-in fee of 475 basis points more than the London  interbank offered rate while the US$100mn loan pays 575 basis points,  the  person  said.  Credit Suisse Group AG led the transaction and contributing lenders included Bank of Tokyo-Mitsubishi UFJ Ltd.,  China Development  Bank  Corp.,  Erste  Group Bank AG, WestLB AG, Indonesia Eximbank and ICICI Bank Ltd., the person said.  –  Bisnis  Indonesia, Bloomberg

Telkom and Elnusa offered Patrakom stakes to Sinarmas

Telkom (TLKM, Rp8,400)
Elnusa (ELSA, Rp345)
Telkom  and  Elnusa offered their combined 80% stake in Patra Telekomunikasi Indonesia or Patrakom to Tanjung  Mustika,  a  company
owned  by Sinarmas group, local newspaper reported. Tanjung Mustika owned 20% stake in Patrakom. The offer will lapse by the end of this week, the  report  said. If Tanjung Mustika decided not to buy the shares, the companies may tender Patrakom shares to interested investors. Patrakom provides  telecommunication network services in the form of data communication, visual, video, and multimedia. – Investor Daily
 

Newmont's gold mine workers in Indonesia started strike , Bumi Resources (BUMI, Rp1,730)

Workers at the Newmont Nusa Tenggara, the Indonesia-based subsidiary of Newmont Mining Corp., the largest U.S. gold producer, began a strike at the Batu Hijau gold and copper mine.  Production  at  the  mine,  Indonesia’s second-largest  copper producer, hasn’t been affected by the strike which began at midnight when about 200 to  300  workers  downed  tools,  Kasan Mulyono, a spokesman at Newmont Nusa Tenggara, said. The company  is responsible for the direct employment of more than 7,000 people, according to its website. Workers planned to stop work for nine days, local newspaper Investor Daily Indonesia reported July 30, citing Zaenuddin Wanden, deputy
head of  the workers union. The strike came after Newmont Nusa Tenggara said it would take legal action against a  ruling  by  the manpower  office  of West  Nusa  Tenggara  province  ordering the company to pay Rp126bn (US$14.1mn) of overtime covering the period from June 2008 to June 2010, the local newspaper Investor Daily said. Newmont Nusa Tenggara  is partly owned by a venture belonging to PT Bumi Resources and  three  local administrations in West Nusa Tenggara. – Bloomberg, Investor Daily

Another oil discovery in Libya , Medco Energi Internasional (MEDC, Rp3,000)

Oil and gas Medco Energi announced another oil discovery in Area 47 Block, Libya, in exploration well 01-47/02 in the Memouniat and  Lower  Acascus formations. The oil reserves at these two formations flowed at the  rate  of between  1,388  and  2,066  barrel per day with gas flowed at the rate of between 0.55 and 2.36 mmscfd, President Director Darmoyo Doyoatmojo said. The discovery is important as this proved that the  Memouniat  and Lower  Acascus  formations had potential of large crude oil reserves in the northern part of Area 47, citing Darmoyo.  This marked the 15th discovery in the block since September 2006, the report said. – Investor Daily

Bumi Resources (BUMI, Rp1,720) ,Floating of Pendopo Energy Batubara shares

Bisnis Indonesia , Bakrie group may float Pendopo Energy  Batubara  by  end-2011  in  Hong Kong Stock Exchange, an unnamed executive  told  local  newspaper.  The value is being calculated, but the target is big because the IPO proceeds will be used for production development, the source said. The shares  listing  in Hong Kong may be due to regulation in Indonesia did not allow, as Pendopo is yet to commence production, the source added. Bumi Resources acquired 84% stake in Pendopo, the report said.