Bumi likely to close KPC acquisition on October 10: Source
Thursday, October 9 2003 - 06:41 AM WIB
“The deal would be closed as scheduled on October 10,” said the source.
According to transaction agreement, Bumi must pay US$500 million in full in October 10. Bumi had already paid $40 million to Rio Tinto and BP. Bumi is reportedly backed by a number of international financial institutions led by CFSB.
KPC president director Noke Kiroyan when contacted by Petromindo .Com declined to confirm. “Just wait for the announcement tomorrow,” he said. “The announcement will be made in due time” said Rio Tinto Indonesia deputy director Anang Noor.
Bumi officials are not available for comment.
KPC operates a huge coal mining site in Sangatta, Kutai Timur regency, producing about 16 million tons a year. Some 96 percent of the high quality coal is exported to international markets, generating $450 million in revenue each year. Under a contract of work with the central government, the KPC owners are obliged to divest a majority stake to local investors. But this divestment program has been stalled for more than two years due to various reasons.
KPC is equally owned by Rio Tinto and BP.
The deal with Bumi has caused a furor as it was done at a time when a team set up by the Office of the State Minister of State Enterprises was in the process of finalizing talks with the East Kalimantan administration and state coal mining firm PT Tambang Batubara Bukit Asam on the divestment of a majority stake in KPC. The province and the state firm would purchase a 51 percent stake in KPC.
The controversial plan caused the Jakarta Stock Exchange to suspend the trading of Bumi's shares for a few days last month. After the company provided an explanation to market authorities, JSX resumed the trading on Aug. 20.
Bumi's shares were traded on the JSX at Rp 185 (2 U.S. cents) on Thursday, up from Rp 175 the previous day.(godang)