East Kutai regency ready to buy KPC shares

The East Kutai regency is ready to acquire part of shares of East Kalimantan-based coal producer PT Kaltim Prima Coal, which will unload the shares under the company's mandatory divestment program.

"We will buy the shares directly, and not through third party," said East Kutai regent Mahyuddin following a meeting with Vice President Hamzah Haz. He said that a financial institution had offered the regency loan amounting to US$400 million to finance the acquisition.

He said that the regency would buy about 18 percent of the 51 percent shares which would be divested by the existing shareholders to local investors.

KPC's shareholders Rio Tinto and BP Plc recently announced that it would sold their entire stake to local company Bumi Resources for US$500 million. The planned sale of shares in one of the country's major coal producers was made when the two firms were still involved in divestment negotiation with the local East Kutai administration.

However, the new would-be owner Bumi Resources said it would continue the divestment process although KPC was no longer owned by foreign investors. (*)