Goldman alumni Walujo has second go at Indonesia Bumi

By Harry Suhartono and Sara Webb

JAKARTA (Reuters) - Patrick Walujo of private equity firm Northstar Pacific has long coveted Bumi Resources (BUMI.JK), Indonesia's biggest coal miner and the Bakrie group's prize that was put up for sale to settle debts of more than $1 billion.

If Walujo's latest bid for Bumi succeeds, he will have thrown a much-needed lifeline to Bakrie & Brothers (BNBR.JK), which has interests in coal, palm oil, telecoms and property and is controlled by the family of Chief Social Welfare Minister Aburizal Bakrie.

The Bakrie business empire borrowed heavily to expand and is now struggling to pay back debt, prompting investors to dump Bakrie group shares amid a global sell-off. But for Northstar, Bumi could prove a challenge to manage.

Walujo may have a couple of Indonesian state-owned enterprises in his consortium, and will have to deal with ministers as well as the local politicians and communities in the districts where Bumi's mines are located.

Walujo, 34, did not respond to several requests for an interview. But those in the tight-knit private equity community who follow Indonesia say he has the skills to pull off the deal.

A Goldman Sachs (GS.N) alumni, analysts say he built up an enviable network of contacts as a young investment banker and through his marriage to the daughter of Theodore Rachmat, who previously ran auto distributor Astra International (ASII.JK).

It was at Goldman that he got to know giant U.S. private equity firm Texas Pacific Group (TPG) TPG.UL, which now has a joint venture with Northstar and which may join in the Bumi deal.

Walujo's Facebook entry shows his network includes high-profile Indonesian officials such as Dino Patti Djalal, President Susilo Bambang Yudhoyono's foreign affairs spokesman.

NETWORKING

Those networks have proved useful.

When Indonesian coal miner Adaro Indonesia needed strategic investors, Walujo worked on the deal and wooed a consortium including his father-in-law, the Government of Singapore Investment Corp (GIC), Citigroup (C.N), and private equity fund Farallon Capital, a person familiar with the situation said.

"Thanks to his in-laws, he's been hanging around the coal sector for years," said one person who knows him but did not want to be quoted by name.

Bumi controls two major coal mines, PT Kaltim Prima Coal and PT Arutmin Indonesia, located in Indonesia's resource-rich East Kalimantan province. Both mines produce high quality coal used in power plants.

Walujo tried to buy Bumi from the Bakrie family in 2006, bankers said, but was outbid by a rival, and the deal later fell apart. Undeterred, Northstar offered $1.3 billion for a 35 percent stake in Bumi earlier this month.

The Northstar deal values Bumi at $3.7 billion, while its current market value is now 63 percent below that, at $1.37 billion, prompting talk that the deal will either fall apart or have to be renegotiated.