Businessman David Lim backs up East Kalimantan move to acquire KPC shares

Businessman David Lim, a nephew of the country's once richest business tycoon Liem Sioe Liong, is believed to be behind the Jakarta-based PT Intan, which has signed a memorandum of understanding with the East Kalimantan administration to finance the local government plan to purchase a 51 percent stake in the giant coal mining company PT Kaltim Prima Coal (KPC).

The local Kaltim Post daily reported on Saturday that PT Intan was positive to be the financier for the acquisition of the KPC shares, but the division of shares between Intan and the East Kalimantan government was still unclear.

The paper said that one option being considered is that PT Intan would form a new joint venturewith the provincial owned investment company called Perusda Melati Satya Bhakti.

Legislators and the East Kalimantan public have been calling on the local administration to provide more information about PT Intan and the structure of the business deal made with the company. There is not much information about David Lim. But Liem Sioe Liong is the founder and controlling shareholders of the Salim Group, once the country's largest conglomerate. The group has transferred a large number of its business assets to the government including shares in various coal-mining companies in a bid to repay debt to the government.

After more than a year of negotiation talks, the government finally ordered KPC that it must divest up to 51 percent of its shares to the local East Kalimantan. But KPC seems to be disappointed with the central government decision, as it would lose its controlling ownership in the company to another investor, possibly PT Intan. Recently the KPC management was reportedly to have increased the price of the 51 percent shares to around US$880 million from the initial estimated figure of more than $300 million. (*)