EXCLUSIVE - East Kalimantan, KPC agree on share price
Wednesday, November 1 2000 - 06:30 AM WIB
The East Kalimantan provincial administration had reached an agreement on the price of the shares in coal mining company PT Kaltim Prima Coal (KPC) to be acquired by the administration, a top official of the ministry of energy and mineral resources said on Wednesday.
Director general of mining Surna T. Djajadiningrat told Petromindo. Com the provincial administration and the coal company had agreed on the price of US$175 million for 30 percent shares of KPC.
This means one percent share in KPC is valued at $5.83 million. The company is thus worth $583 million.
However, Surna refused to reveal how the province would raise funds to buy the shares.
"You should ask the province about it," he said.
Under the contract of work, KPC is required to sell up to 51 percent of its shares to either the Indonesian government, state companies, private companies or Indonesian citizens after ten years of operation under the divestment program.
The government has said it was not interested in buying the shares, offering the share acquisition opportunity to state tin mining company PT Timah and the East Kalimantan provincial administration. Timah has dropped efforts to acquire the shares following the disagreement with KPC over price, but the provincial administration is pursuing plans to buy the shares.
According to Surna, the province and KPC is still in disagreement about the number of shares that KPC had to divest.
The province argued that the coal company had to sell 44 percent shares this year and 51 percent shares by the first quarter of next year. However, KPC insisted it was obliged to divest only 37 percent this year and 44 percent next year.
Surna told legislators on Tuesday during a meeting between the ministry of energy and mineral resources and the House of Representatives' Commission VIII, which oversees mines and energy affairs, that the lawyers representing both KPC and the government would sit together this week to settle the issue,
If both parties failed to reach an agreement on the issue, they will bring the case to arbitration. (Alex)