East Kutai wants to ‘sell back’ 13.6% KPC stake to Bumi

Publicly listed PT Bumi Resources confirmed on Tuesday the administration of East Kutai regency wanted to “sell back” part of its stake in East Kalimantan-based coal producer PT Kaltim Prima Coal (KPC) to Bumi.

“We are in negotiation with the regency. They (East Kutai) want to sell back a 13.6% stake in KPC to us,” Bumi’s head of investor relations Peter Tabalujan told Petromindo.Com.

Peter declined to mention the price for the stake. He only said the negotiation is expected to be completed by March.

Bumi, which last year bought out the firm from Anglo-American energy firm BP PLC and Anglo-Australian mining giant Rio Tinto, is in the process of divesting 51 percent of KPC shares to Indonesian investors, as required by the contract signed by both foreign firms with the Indonesian government.

Last October, Bumi and East Kutai signed a sales and purchase agreement to enable the latter to buy an 18.6 percent stake in KPC for US$104 million. The agreement, however, has yet to be executed.

KPC operates a huge coalmine in Sangatta, East Kutai. The company produced 16.2 million tons of coal in 2003. (Godang)