Bakrie's Conglomerate Group After Half A Share Ownership In Jungleland, Why?

Jungleland. (Photo: Doc. Bakrie Developments)

JAKARTA - Bakrie Group through PT Graha Andrasentra Propertindo Tbk (JGLE) released 51.44 percent of share ownership in PT Jungleland Asia (JLA) which manages the Jungleland Theme Park recreational park in Sentul. The majority of JLA's shares were sold to strategic investors, namely PT Adiprotek Environdunia (AE), a company that is not affiliated with the company. Thus, JGLE's ownership of JLA shares is 48.56 percent. JGLE management explained that the COVID-19 pandemic, which has been going on since the end of 2019, has suppressed many industries, especially the amusement and recreation park industry, because it relies heavily on crowds but needs to be limited in order to reduce the potential for transmission. Despite operating, Jungleland Theme Park had been operational discontinued for almost 2 years. This makes JLA lose its income. Meanwhile, the burden of employee salaries and vehicle maintenance must still be issued, and in addition there is an obligation to pay interest to banks. Therefore, JGLE through JLA has restructured credit facilities with PT Bank Rakyat Indonesia (Persero) Tbk and JLA must be able to fulfill the commitment to pay interest and principal in accordance with the restructuring schedule. Although the condition of the Indonesian economy and community activities are starting to recover, JGLE and JLA's operational and financial activities need time to return to the conditions before the COVID-19 outbreak, the company invites strategic investors to deposit additional capital at JLA in order to fulfill the restructuring commitment to BRI and JLA's working capital. With this strategic investor capital deposit, JGLE's share ownership in JLA, which was previously 99.999 percent will be diluted and the company will no longer be the controlling shareholder in JLA, however, the company is optimistic that the capital structure will be better because there is a decrease in obligations to creditors. With a reduction in financial expenses, the company can focus on developing other company's assets. Management believes that without AE's presence at JLA, it is very difficult for JLA and the company to fulfill the commitment to restructuring loans to BRI's creditors/Bank. This can trigger the default conditions for loans that lead to the overall release of JLA or 100 percent, resulting in greater losses for the company," said JGLE President Director Resza Adikrenna in an official statement, quoted Friday, September 30. The 51.44 percent release scheme for JLA's share ownership to AE, namely AE, obtained 51.44 percent of JLA's share ownership by investing in capital worth Rp. 251 billion through the issuance of new JLA shares. Capital investment will be used by JLA for payment of principal and interest installments to BRI as well as working capital. For capital deposits by AE, the company's ownership in JLA is 48.56 percent so that the company is no longer the controlling shareholder and consolidates JLA's financial statements. "JLA's consolidation not only emits the full operational burden and financial burdens of JLA, which for the past few years has suppressed the company's performance but also allows the company to re-developed new projects, especially quick yielding projects in the form of landed/house residential sites with medium segments," said Resza. He added that the company also already has landbanks in several strategic locations for housing development. With this condition, the company targets to be able to record a positive financial performance in 2023 after in recent years recording negative financial performance. For information, JGLE is under the auspices of the Bakrie business group. Where, a subsidiary of PT Bakrieland Development Tbk (ELTY), namely PT Surya Global Nusantara, holds 38.761 percent of JGLE's shares.