Bahana starts valuation of KPC shares

The state-owned securities firm PT Bahana Securities, which has been appointed as an independent appraiser of shares of coal mining giant PT Kaltim Prima Coal (KPC) on behalf of the government, started working on Thursday by conducting a due diligence process on the East Kalimantan-based company, and plans to send its officials to the province next week to seek more data.

The Bisnis Indonesia daily quoted Bahana president Rinaldi Firmansyah as saying that he was optimistic that Bahana could complete the job on time to allow the divestment process of KPC to be completed in March as targeted.

KPC, which is equally controlled by Rio Tinto and BP, is obliged to divest its 51 percent stake to local investors. The program was supposed to be completed last year but was delayed due to disagreement over the price of the shares particularly with the East Kalimantan administration, which demands to be given top priority to purchase the stake.

KPC shareholders put 100 percent shares at a value of US$880 million or around $448 million for a 51 percent stake. This is based on the appraisal made by its independent appraiser Salomon Smith Barney.

Bahana is also expected to make negotiation with Salomon Smith Barney to reach an agreement over the price of the KPC stake, according to government officials.(*)