Entry of new bidders cast new doubt over KPC divestment program
Saturday, March 23 2002 - 06:17 AM WIB
On Saturday, reports said that PT Nusantara Energy, a company owned by former chief of army strategic command (Kopassus) Lt. Gen. (retired) Prabowo Subianto, is also interested in acquiring the KPC stake.
Prabowo, who is also the son in-law of former authoritarian president Soeharto, was seen at the ministry of energy and mineral resources on Friday, but he declined to comment on the acquisition plan.
Spokesman of the ministry Nurwinakun was quoted by the Tempo daily as saying that Nusantara Energy is one of several investors which have expressed interest to acquire the KPC stake. The others include PT Perusda Melati Bhakti Satya, PT Bumi Resources, PT Batubara Borneo Batua, and a Kutai-based non-governmental organization.
Perusda Melati is an East Kalimantan provincial-owned investment company.
KPC, which is equally owned by Anglo-Australian mining group Rio Tinto and Anglo-Amerian energy giant BP Plc., is obliged to divest up to 51 percent stake to the Indonesian government or local private investors.
The divestment program was supposed to be completed in 2000, but had been delayed several times due to various reasons including disagreement of the value of the shares.
The new deadline now is end of March. KPC and the central government has recently reached agreement on the share price: US$822 million for 100 percent shares or around $419 million for a 51 percent stake, which was lower than the previous $453 million demanded by KPC.
The East Kalimantan government has been named by Jakarta as the preferred bidder for the KPC stake.
But East Kalimantan deputy governor Syaiful Teteng lambasted KPC for issuing a notification in Jakarta-based newspapers about its planned share offer.
Syaiful was quoted by the local Kaltim Post daily as saying that the KPC stake must go into the hands of East Kalimantan.
?I?m puzzled, why should KPC announced the planned sale to many parties? This is not right. They have failed to keep their promise,? he said.
Syaiful accused KPC of trying to prevent East Kalimantan from purchasing a controlling block of shares in the company.
?They have announced it in newspapers, so the divestment program is open to other bidders, not only for the East Kalimantan administration,? he said.
KPC clearly disagree with the central government appointing East Kalimantan as the preferred bidder. Sources said that KPC wants its stake to be sold via an open tender process.
It is still not clear, however, whether this latest development would cause East Kalimantan to back down from the bid. In October last year, the administration filed a lawsuit against KPC and its shareholders over delay in the divestment program. But following the recent divestment price agreement, East Kalimantan also expressed its intention to drop the lawsuit, although until now it had made no such move yet.
KPC has said that it would only agree to proceed with its divestment program as scheduled if East Kalimantan drops its lawsuit.
Meanwhile, KPC legal counsel Todung Mulya Lubis accused East Kalimantan legal team for deliberately trying to delay talks for calling off the East Kalimantan lawsuit
Todung was quoted by Kaltim Post daily as saying that a meeting between himself and the East Kalimantan lawyers was supposed to be held on Thursday, but the latter did not show up.
He warned that this could further delay the share divestment program.
Elsewhere, Syaiful also lambasted the East Kutai administration which had quietly teamed up with PT Batubara Borneo Batua to purchase the KPC stake.
Syaiful said that the East Kutai move has created new friction in the overall KPC divestment affairs.
He said that it had been previously agreed with East Kutai that the KPC stake would be acquired by the East Kalimantan administration via the province-owned PT Perusda Melati Bhakti Satya, which will team up with a private investor called PT Intan Bumi Inti Persada (IBIP). This consortium has promised to give East Kalimantan 10 percent stake in KPC if it wins the KPC shares. Meanwhile, East Kalimantan provincial administration promised East Kutai administration that it would get 60 percent of revenue from the 10 percent share portion of the province in KPC.
KPC operates a vast mining sites in Sangatta area, in East Kutai regency. It has an annual production of around 15.9 million tons, and export most of the coal output.
However, Batubara Borneo offers greater benefits: 12 percent stake in KPC and US$5 million in cash to help improve the welfare of the local people.
Syaiful said that the move by East Kutai had not been consulted with the provincial administration.
He also said that the owner of Batubara Borneo, Henry Leo, is a businessman who had been linked with an insurance scam in the past. He added that the company had not been registered at the ministry of justice.
With all these latest developments, there is possibility that the widely-followed divestment program of KPC stake would be delayed once again, which could create new social uncertainty in the East Kalimantan province.(Amoros)