East Kalimantan company promised 10 percent shares in KPC

The East Kalimantan provincial administration would receive a 10 percent stake in coal mining company PT Kaltim Prima Coal (KPC) for free if it tied up with PT Intan Bumi Inti Pradana to buy 51 percent shares in the coal company.

Syahfur Hakim, president of East Kalimtan provincial administration-owned PT Melati Satya Bhakti, through which the province would buy KPC's shares, said Inti Bumi was ready to provide Melati Satya with US$215.8 million or Rp 1.5 trillion in funds to buy 51 percent of KPC.

Inti Bumi would hold 41 percent shares and give the remaining 10 percent shares to Melati Satya Bhakti for free.

Syahfur said the 10 percent shares were valued at Rp 150 billion.

"It is big enough. East Kalimantan deserves it," Syafur said.

Under its contract of work, KPC, which operates a huge coal mine in Sangatta, East Kalimantan, is required to sell up to 51 percent of its shares to the Indonesian government, Indonesian owned companies or Indonesian citizens after a certain perdio of production.

The East Kalimantan provincial administration has expressed interest to buy the shares. However, because it does not have any money, it wants to team up with Inti Bumi linked with the family of Sudono Salim, a crony of former President Soeharto, to buy the shares. (*)