Bumi effectively controls 95 percent of KPC shares

Top coalmining house Bumi Resources said it had completed divestment process of its subsidiary PT. Kaltim Prima Coal (KPC) as stipulated by coal contract of work but retained majority shares in the company.

Bumi said in an explanatory report to The Jakarta Stock Exchange that its unit Sangatta Holdings Limited (SHL) and Kalimantan Coal Limited (KCL) had signed agreement to sell 18.6 percent of KPC shares to East Kutai government in 2003. In 2004, East Kutai government transferred its purchasing right to PT.Kutai Timur Energi (KTE), whose majority share is owned by East Kutai government. KTE then waived its right to buy 13.6 percent of KPC shares but get 5 percent for free. Bumi said the government had given approval for the transaction on October 22, 2005.

Reports said that the value for 18.6 percent of KPC shares in 2004 was set at US$104 million.

In March 2005, Bumi, through SHL and KCL again sold its 32.4 percent shares in KPC to local company called Sitrade Nusa Globus (SNG) for US$399.98 million. To accommodate the share purchase SNG formed subsidiary called PT.Sitrade Coal (SC) on August 22, 2005. On August 26, Bumi bought 99 percent shares of SC for Rp.7 billion or around US$700,000.

With the transaction Bumi said, it had completed its investment obligation. After divestment completion Bumi is effectively controlling almost 95 percent of KPC?s shares. After the transaction, KPC shareholders line up are as follows: SHL 24.5 percent, KCL 24.5 percent, KTE 5 percent, Bumi 13.6 percent and SC 32.4 percent.

Bumi bought 100 percent of KPC shares from Anglo Australian miner Rio Tinto and Anglo American energy giant BP, which had equal shares KPC, in 2003 for US$500 million. Rio Tinto and BP owned KPC through their subsidiaries SHL and KCL.

Under the coal contract of work, KPC is still required to divest 51 percent shares to Indonesian companies despite already indirectly being acquired by Bumi. (alex)