Bumi pays $40 million in deposit to acquire KPC shares

PT Bumi Resources has paid US$40 million in deposit to shareholders of coal producer PT Kaltim Prima Coal (KPC) as a step to acquire 100 percent shares of the East Kalimantan-based company, Bumi president director Ari S. Hudaya said Friday.

?We have paid them $40 million as required by the sales and purchase agreement,? Ari said in Bumi?s public expose meeting at the Jakarta Stock Exchange (JSX).

Bumi and KPC shareholders had agreed that the entire shares of KPC were valued at $500 million.

JSX had suspended the trading of Bumi?s shares in the bourse and had ordered the company to hold a public expose to unveil the chronology of its plan to acquire KPC and the progress of its efforts to raise funds for that purpose. Also, it had been required to make public the mechanism of payment for KPC shares, creditors? approval and capability to finance the acquisition, and its readiness to realize the acquisition.

Ari said in the public expose meeting that several international creditors were prepared to provide Bumi with loans for acquiring KPC. He however refused to unveil their names, saying that it had agreed with KPC shareholders to keep secret the names of the creditors. Ari also declined to mention the amounts of funds to be provided by the lenders.

He said further that Bumi would fully pay by October of this year the $500 million to Sangatta Holding, which is wholly owned by Rio Tinto; and Kalimantan Coal, which is wholly owned by BP. Sangatta Holding and Kalimantan Coal, which are registered overseas, equally own KPC.

Ari said that after acquiring KPC, Bumi would fulfill KPC?s contractual obligation of selling 51 percent of its shares to Indonesian companies through the government. He said that Bumi would do it as soon as possible.

He declined to comment on East Kalimantan provincial administration?s threat to block Bumi?s acquisition plan.

East Kalimantan administration officials and the government were surprised by Rio Tinto?s recent announcement that Bumi would acquire the entire shares of KPC. The province and state coalminer PT Tambang Batubara Bukit Asam (PTBA) are actually in the process of acquiring 51 percent of KPC shares, which were formally offered to them last year through the government. Of the 51 percent, 31 percent was offered to East Kalimantan and the remaining 20 percent to PTBA.

The government and KPC shareholders last year agreed on a $822 valuation of the entire shares of the company. (leo)