UPDATE 1-Indonesia's Bakrie says aims to settle $1.2 bln debt

(Adds details, background)

JAKARTA, Oct 12 (Reuters) - Indonesian conglomerate, PT Bakrie & Brothers (BNBR.JK), said on Sunday it aimed to settle $1.2 billion of debt within a week under a deal that may involve selling a 10 percent stake in the country's top coal miner Bumi Resources (BUMI.JK).

Traders have highlighted concerns over leveraging at the Bakrie group and worries there might be forced selling of shares which had been pledged as collateral for loans. The company denied last week there had been forced selling.

Bakrie & Brothers said in a statement on Sunday that the global market meltdown had compelled it to "rationalise" its share portfolio in Bumi, Bakrie Telecom Tbk (BTEL.JK), Bakrieland Development Tbk (ELTY.JK), Bakrie Sumatera Plantations Tbk (UNSP.JK) and Energy Mega Persada Tbk (ENRG.JK).

Asked if Bakrie & Brothers was considering selling a 10 percent stake in Bumi, Dileep Srivastava, a director of the firm, said by telephone text message: "That's a possibility."

The Indonesia Stock Exchange suspended trading last Tuesday in the shares of the six firms, controlled by the family of chief social welfare minister Aburizal Bakrie, pending clarification of a number of issues.

The stock market was then closed a day later for the rest of the week after the benchmark composite index .JKSE had dropped by more than 20 percent in just three sessions since Sept 29.

Shares of Bakrie and Bumi have lost about 50 percent of their value in the last month alone.

Bakrie & Brothers said the action was a response to "continuing financial turmoil, irrational global market conditions and plunging international stock markets."

The firm said the situation for the group had been aggravated by "rumours, distress news creaters (and) short sellers."

Bakrie & Brothers said it was the final stages of talks with potential local and strategic partners on a deal and that it supported an extension of the blackout on its shares until a deal was concluded.

According to Bisnis Indonesia newspaper, Indonesia's state enterprises minister Sofyan Djalil said on Friday the government could allow state-owned mining firms PT Aneka Tambang Tbk (ANTM.JK) and PT Tambang Batubara Bukit Asam (PTBA.JK) to acquire Bumi shares.

Indonesian businessman Tommy Winata, who had also been linked in media reports to buying Bumi shares, told Reuters he was "not interested and never thought about it."

India's Tata Steel Ltd (TISC.BO) has also been linked in media reports to a deal.

Bakrie & Brothers had total liabilities of 18.6 trillion rupiah ($1.89 billion) as of June and out of this 14.8 trillion rupiah were short-term liabilities, according to Reuters data.

Bumi said in a statement that it planned to buy back an additional 20 percent of its 19.4 billion outstanding shares on top of a 10 percent buyback announced last week and a 3 percent buyback approved in June.

(Reporting by Harry Suhartono and Andreas Ismar, Writing by Ed Davies)