Due diligence team to announce decision on KPC divestment tomorrow

A senior government official said on Monday that a team that conducts due diligence on state owned companies that are interested in acquiring 20 percent stakes of coal miner PT. Kaltim Prima Coal would likely announce its decision on October 15.

?The team would likely announce its decision on Tuesday (October 15). State coal miner PT. Tambang Batubara Bukit Asam (PTBA) and state miner PT. Aneka Tambang are the final candidates for KPC?s 20 percent stake,? said Djoko Darmono, secretary general of ministry of energy and mineral resources in an interview with Petromindo.Com.

Due diligence team is tasked to evaluate candidates? financial and operational capability.

Last August, the government decided that 31 percent of KPC shares would go to company endorsed by East Kalimantan and East Kutai regency administration, while 20 percent would go to state owned company. KPC, which is now equally owned by BP and Rio Tinto, is scheduled to divest 51 percent shares this year at US$ 822 million on 100 percent shares basis.

Thus far, East Kalimantan administration has not submitted its candidate to be scrutinized by due diligence team because its was still insisting to acquire the whole 51 percent of KPC shares. The deadline for due diligence is October 30.

East Kalimantan is backed by businessman David Salim, a nephew of Indonesian tycoon Liem Sioe Liong, also known as Sudono Salim, a long time business ally of former president Soeharto.

Petromindo.Com?s government and industry sources said that East Kalimantan is struggling hard to form joint venture company with whichever state owned company would be appointed to buy 20 percent stakes in order to gain majority control of the giant coal-mining firm.

?East Kalimantan is lobbying hard to secure deal to form JV with Antam or PTBA to gain majority control over KPC. Until such deal is secured, they will stick to their claim to acquire the whole 51 percent for themselves and would not submit their candidate(s) to due diligence team,? said the sources. The sources said if East Kalimantan could get commitment from state owned companies to form JV to run KPC, it would still be able to effectively control majority shares of KPC.

Antam president Dedi Aditya Sumanegara had signaled that the formation of consortium, which consisted of Indonesian companies, would be ?conducive to national interest?. He however, refused to say whether Antam had secured deal with East Kalimantan to form JV to run KPC.(godang/alex)