East Kutai mulls to sell shares in KPC

East Kutai regency administration is considering selling its 5 percent shares in East Kalimantan coal miner PT. Kaltim Prima Coal (KPC) due to small dividend yield, a regency top official said as quoted by Kompas daily.

Regent Awang Faroek said that in 2006, the regency only received US$1.6 million in dividends. ?That?s small amount, as the sale of 5 percent of KPC?s shares could fetch US$100 million,? he said. He said proceed from the sale could be used to increase the people?s welfare. He said the sale of the regency?s shares in KPC would be more beneficial than receiving a relatively small amount of dividend each year.

Faroek said the regency has yet arrived to final conclusion to sell.

East Kutai received 5 percent shares of KPC for free from current 95 percent shareholder PT. Bumi Resources. The free shares were given to smoothen acquisition process from previous owners; Rio Tinto and BP. Bumi has agreed to sell its entire stake in KPC together with 100 percent shares in South Kalimantan coal miner PT. Arutmin Indonesia to PT. Borneo Lumbung Energi for US$2.3 billion.(*)