Armadian decides to use pre-emptive rights to buy stake in Berau Coal

Local firm PT Armadian Tritunggal has decided to exercise its pre-emptive rights to acquire PT United Tractors?s (UT) stakes in East Kalimantan-based coal producer PT Berau Coal, a source said Monday.

Earlier, UT signed a sales and purchase agreement with PT Indika Inti Corpindo to sell its entire 60 percent stakes in Berau, for US$44.56 million.

However, Berau?s existing shareholders, Armadian and Japan's trading powerhouse Sojitz Corp. (formerly Nissho Iwai), have option until June 7 to exercise their pre-emptive right to buy UT?s shares with similar terms and condition with Indika.

UT earlier said that transaction is expected to be closed by July 30, 2004, while the agreement would be dropped if no transaction occurred as of August 31, 2004.

If the transaction with Armadian is completed, Armadian will be the major shareholder in Berau with 90 percent stake, while Sojitz Corp holds the remaining 10 percent.

Armadian is owned by Berau?s mining contractor PT Mentari Bukit Makmur and others local businessmen.

Berau is one of Indonesia's top coal producers with a production of 7.46 million tons of coal last year.(alex)