Bumi may still control 95% of KPC despite divestment obligation: Analyst
Tuesday, June 1 2004 - 03:33 AM WIB
Norico Gaman, an analysts of PT BNI Securities, told Bisnis Indonesia daily that it would be difficult for the central government and East Kalimantan administration to provide funds for the purchase of 51 percent of KPC shares as required. The two are the potential investors for the stake.
Based on prices set in 2003, the value of the entire KPC shares is about US$822 million. With this price, either the central government or the East Kalimantan has to provide at least US$412 million to finance the purchase of the 51 percent shares.
“With an exchange rate of Rp 9,000 per dollar, the government will need at least Rp 3.7 trillion.,” he said. “Where the government will get the money because it is almost impossible to pay the KPC shares from the state budget,” he added.
Bumi, which took over the entire KPC shares from BP and Rio Tinto last year, is currently calculating the new price of the KPC shares to meet the government requirement because the price set in 2003 did not longer reflect the real value of the company.
“If the purchase is based on the new price, the funds to be needed to pay the 51 percent shares of KPC could be larger,” Norico Gaman said.
KPC’s former shareholders, Rio Tinto and BP, were required to divest up to 51 percent of its stake in the coal producer two years ago as part of the mandatory divestment requirement stated in the company’s contract of works.
Bumi Resources, KPC’s new shareholder, had already sold 18.6 percent of the company’s shares to East Kutai regency’s authority immediately after it took over the mining company last year. It means that the company needs to sell another 32.4 percent in order to complete the mandatory divestment program.
But the East Kutai regency faces difficulties to settle the payment. The regency earlier said that it could sell back the 18.6 percent share of KPC to Bumi, if it could find the money for the payment. (*)