East Kutai lobbies central govt to secure loans for buying KPC shares
Saturday, February 14 2004 - 03:01 AM WIB
"We have made some progress in lobbying central government officials and House of Representatives members. The regent is highly optimistic that the central government will support us to get loans from overseas creditors," said regency secretary Masli Hassan in a telephone interview.
Existing laws allow regional administrations to seek foreign loans only with approval from the central government.
Masli said that Regent Mahyuddin had held talks about their plans with senior officials of a number of government institutions including the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Home Affairs and the House of House of Representatives.
Special teams, including officials of the regency administration's company Perusda Pertambangan dan Energi, had been formed to follow up on the regent's move, Masli said.
Masli said they had approached some foreign banks with offices in Indonesia. He refused to mention the names of the banks, while Mahyuddin said that they were seeking a combined US$120 million in loan from a British bank and an American bank.
PT Bumi Resources, the owner of KPC, agreed last year to sell to East Kutai 18.6 percent of KPC shares for US$104 million as part of KPC's mandatory divestment. The sale agreement was made last October, a few months after Bumi took over entire shares of KPC from world energy and mining giants Rio Tinto and BP Plc.
Mahyuddin said they would offer a 13.6 percent stake in KPC to local companies if it could not find enough funds to settle the payment for the 18.6 percent shares.
He said that the East Kutai regency had no obligation to resell back the shares to Bumi.
Bumi is now in the process of divesting a 51 percent of KPC shares to local investors as part of the mandatory divestment program stated in KPC's contract of works. KPC, which operates a huge coal mine in Sanggata, East Kutai, produced about 16.2 million tons of coal in 2003. (leo)