Bumi?s acquisition will be used as reference for KPC divestment
Saturday, July 26 2003 - 04:51 AM WIB
?If the 100 percent of KPC shares were sold for US$500 million, the price of the 51 percent that would be sold under the divestment program should be only half of the amount,? said Roes Aryawijaya, the Deputy of Minister for Supervision of State Companies.
Bumi Resources surprisingly announced early this week that it had reached an agreement with the shareholders of KPC, Rio Tinto and BP Plc, to acquire the two companies? 100 percent ownership in the East Kalimantan-based coal producer for $500 million.
Bumi Resources said that the company is committed to continue KPC?s divestment program despite the change in KPC?s ownership. KPC is required by the law to divest up to 51 percent of its shares to either the government, state owned enterprises, Indonesian companies or Indonesian citizens as part of the mandatory divestment program imposed on foreign coal mining companies. The divestment of the 51 percent should have been made several years ago but it had been delayed due to difference in prices.
The government has allowed two companies respectively owned by the East Kalimantan provincial administration and the East Kutai regency administration to buy 31 percent of the 51 percent, and state owned coal firm PT Tambang Batu Bara Bukit Asam to buy the remaning 20 percent. The price for the divestment is based on the total value of KPC?s assets which reach about US$889 million. It means that the 51 percent of the shares are worth a half of the amount.
The takeover has raised suspecion not only due the low price given by BP and Rio Tinto to Bumi Resouces but also due to the fact that the deal was made when the two mining companies were still involved in negotiations to sell their 51 percent stake to the local government and Bukit Asam.
The negotiations for the share divestment have been stalled for many times not only due differences in prices but also the reluctance of KPC shareholders to sell their shares to the local government.
The suspecion is getting deeper after the leakage of a document indicating that KPC has sold its coal reserves under a forward sales transaction for Rp 620 billion.
Hermain Okol, the chairman of the Commission A of the East Kalimantan?s Legislative Council, told Neraca that the local legislators and the local government were still considering the right punishment for KPC.
Other local legislators have threatened to close the company?s mining operations in the province. The threat has also received a support from the province?s governor.(*)