Astra drops plan to purchase Bayan: Report

Automotive distribution giant PT Astra International Tbk has dropped plans to purchase 80 percent of coal mining firm Gunung Bayan Group as both parties failed to reach an agreement on price in negotiation, Bisnis Indonesia Daily reported on Monday.

Astra submitted a bidding price of US$1.5 billion, but the Bayan owner asked a higher price, US$1.8 billion, due to the increase in the price of coal on the global market.

The negotiation had failed because of disagreement on price and an Indian corporation dared to offer US$2.6 billion for the stake, a senior executive was quoted by the newspaper as saying over the weekend.

The anonymous executive also said Bayan would go ahead with its plan to list its shares on the Indonesian Stock Exchange this year.

Meanwhile, President Commissioner of PT Bayan Group Michael Sumarijanto denied that Astra had dropped its acquistion plan.

"The allegation that an Indian company is approaching Bayan is also untrue," Michael told Petromindo.com.

Michael also said Bayan had yet to decide whether to offer its shares to the public this year.

"There is not yet any decision regarding IPO," he said.

The company, which is controlled by Malaysian businessman Dato Low Tuck Kwong, has six mining subsidiaries, including three coal mining firms in East Kalimantan. One of the firms is PT Gunung Bayan Pratamacoal which plans to produce four million tons in this year. (*)