Bumi to follow KPC?s contractual obligation
Wednesday, July 23 2003 - 08:38 AM WIB
?Divestment of KPC shares will be carried out in accordance with the company?s contract with the government,? Bumi Resources? chief of commissioners Soeryo B Soelisto told reporters after attending his company?s extraordinary general shareholders meeting in Jakarta.
Soeryo said however that his company would negotiate with the government the price of KPC shares.
KPC shareholders, Rio Tinto and BP Plc, announced Monday they had sold all their shares in KPC to Bumi Resources for US$500 million. They equally owned KPC, Indonesia?s second largest coal producer.
KPC started commercial operation in 1992, and its contract obliges it to divest 51 percent of its shares to Indonesian investors 10 years later. However, the share divestment plan had been delayed for at least three times mainly due to a dispute over the percentage of the shares that must be sold to the central government and East Kalimantan provincial administration.
Last August, KPC formally offered 51 percent of its shares to Indonesian investors through the government, which then allocated 31 percent of the 51 percent shares to East Kalimantan and 20 percent to state coalminer PT Batubara Bukit Asam.
Bumi Resources? acquisition of 100 percent of KPC shares surprised the government and East Kalimantan provincial administration, which were in the process to buy 51 percent shares in the mining firm.
Early last year, the government and KPC shareholders agreed that the 100 percent shares of KPC were valued at $822 million.
KPC, whose coal is mostly for exports, operates a huge coalmine in Sangatta, East Kalimantan.
Meanwhile, Bumi Resources, started operation in 1973 with hotel and tourism businesses, currently has interest in mining and oil.
Bumi Resources holds 80 percent South Kalimantan-based coal producer PT Arutmin Indonesia. (*)