CLSA Bakrieland (ELTY IJ) - post rights issue update from Sarina

The Bakrie Group, through Bakrie Capital and BNBR now holds 19% of Bakrieland, post rights issue of Rp3.2tn (50% dilution). Avenue Capital’s holding is diluted to 12.2% from 24.4% previously. BNBR’s holding was reduced to 2.5% from 10.4% previously.



Comment: This means post rights issue, Avenue lost its majority shareholding status of the company to Bakrie-related group. Pre-rights, Avenue had two seats in the BOC. Bakrieland’s share price has been under pressure along with the other Bakrie names reflecting various negative newsflow hammering the group recently. Bakrieland is now trading at 77% discount to its post-rights NAV. While valuation is looking attractive now, we maintain our cautiously optimistic view on the company. Catalysts for the company will include the potential land-rights reform law, and its execution of Jonggol project

Shareholding of Bakrieland Before After
Avenue Capital 24.40% 12.20%
Bakrie Brothers 10.40% 2.50%
Bakrie Capital 10.60% 16.50%
(and other Bakrie related)