Bumi Resources starts KPC divestment

PT Bumi Resources announced on Tuesday that it had reached an agreement to sell 18.6 percent of its ownership in PT Kaltim Prima Coal (KPC) to the Kutai regency as part of its program to divest up to 51 percent shares to local investors, Kompas reported on Wednesday.

Bumi Resources' president Arie S. Hudaya said that the agreement to sell the 18.6 percent shares to the Kutai administration was signed on Monday evening, marking the start of the divestment program of the East Kalimantan-based coal producer.

But he did not unveil the price of the shares.

The sale of the coal company's shares was made just few days after Bumi Resources formally completed the takeover of the entire KPC shares from former shareholders Rio Tinto and Beyond Petroleum.

Bumi Resouces which also owns 80 percent interest in PT Arutmin, another coal producer based in Kalimantan announced the takeover of KPC a few months ago.

KPC which was equally owned by Rio Tinto and BP, is required by law to divest up to 51 percent of the KPC shares to local shareholders through the ministry of energy and mineral resources. According to the mandatory divestment requirement, the divestment of the 51 percent shares should have been completed by 2001 but it was delayed among others due disagreement over the pricing.

After several delays, the ministry of energy and mineral resources nominated last year two companies: one wholly owned by the provincial government of East Kalimantan to purchase 31 percent of KPC shares and another 20 percent to be purchased by state owned coal mining company PT Batu Bara Bukit Asam (PT BA).

Bumi Resources has said that it would commit to divesting KPC's shares according to an initial plan. (*)