Analysts: Bakrie Plan to Acquire Smartfren Illogical

TEMPO.CO, Jakarta – Analysts question the plan of PT Bakrie Telecom Tbk (BTEL), a subsidiary of Bakrie Group, to acquire a stake in PT Smartfren Telecom Tbk (FREN). Some analysts even said the move makes no sense since BTEL's equity is still at a negative and the company is currently being sued by creditors for failing to pay its debts.

Bakrie Telecom is touted to be buying five to 15 percent stake in Smartfren, with shareholders from both companies expected to reach the final stage of the acquisition next week.

Analyst from Universal Broker Indonesia Satrio Utomo doubts BTEL's acquisition plan, saying the telecommunication operator does not have the necessary funding sources.

According to Satrio, companies under the Bakrie Group usually seek additional capital through rights issue. Satrio estimated that Smartfren, a telecommunication operator owned by the Sinar Mas Group, would not be willing to undergo that mechanism.  

"Bakrie Telecom's intention to own Smartfren shares is difficult realize," he said yesterday.

Echoing a sentiment similar, First Asia Capital Securities analyst David Sutyanto said BTEL's plan is difficult to materialize because of the company's huge debt.

Investa Saran Mandiri analyst Kiswoyo Adi Joe suggested Bakrie Telecom to focus on paying off its Rp3-trillion debt instead of acquiring Smartfren's shares.

On October 29, the Indonesia Stock Exchange (IDX) suspended BTEL from trading. As of yesterday, neither Bakrie Telecom nor Smartfren managements were available to confirm the acquisition reports. 

FAIZ NASHRILLAH | GANGSAR PARIKESIT | DINI PARIKESIT