Antam concerned over divestment timing

State-owned nickel and gold miner PT Aneka Tambang Tbk (Antam) said on Wednesday it was concerned about the government's plan to divest more of its stake in the company in October, due to current weak sentiment in the stock market.

"The management has been ready to support (the sale), but the timing is indeed a concern," Antam president Dedy Aditya Sumanagara told Reuters in an interview.

Nevertheless, Dedy said that the company would proceed with the divestment of the government's stake "as long as the price is good."

Aneka Tambang shares closed unchanged at Rp 1,125 on Thursday.

The government plans to sell a 14 percent stake in Antam in October to help fulfill its Rp 6.5 trillion (US$750 million) privatization target this year. The government needs the proceeds to help cover the state budget's deficit this year and to help fund the heavy costs of recapitalizing the country's stricken banking sector.

After the planned stake sale the state would still hold 51 percent. The government has said it may sell the shares to the market or to a strategic partner.

Dedy also revealed that the company would soon choose the winner from short-listed bidders to build and finance its new Ferronickel (FeNI III) plant.

"The (final) bid will be on August 1, but with Mitsui as the preferred bidder," Dedy said, adding that the development of the new plant would take eight months.

The development of the FeNI project, estimated to cost US$200 million, has been delayed since 1998 due to financing problems, and the company now hopes that building work could start by the fourth quarter. (*)