Five companies interested to buy Kideco?s 41 percent shares

East Kalimantan based coal-miner PT. Kideco Jaya Agung has received letters of interest to purchase 41 percent of its shares as part of divestment process from five Indonesian companies, a company official said Thursday.

Kideco?s managing director Kim Sung Kook told Petromindo.Com on Thursday that the company initially sent offering letters to 19 Indonesian entities including East Kalimantan provincial administration and Pasir regency administration.

Kimj did not disclose the names of the five companies, but saying that its 10 percent shareholders Muji Inti Utama and Sumber Mitra Jaya did not submit letters of interest.. State coalmine PT. Tambang Batubara Bukit Asam and PT. Indonesia Power had also earlier said they were not interested to purchase Kideco?s shares. An industry source also said that it would be very unlikely for East Kalimantan provincial administration and pasir regency administration to submit letters of interest.

Kim said the companies would conduct due diligence on Kideco for a month starting early February, and bidding is expected to be submitted in March, with final sales and purchase agreement seen to be signed in late March this year.

Under the Coal Contract of Work (CCoW), Kideco is required to gradually divest 51 percent of its shares to Indonesian owned after 10 years of commercial production. Kideco had managed to sell 10 percent shares to two Indonesian companies namely PT. Sumber Mitra Jaya and PT. Muji Inti Utama, which got 5 percent each.

The divestment of the 41 percent stake in Kideco had been delayed due to the prolonged legal battle between the company and the East Kalimantan provincial administration and Pasir regency administration.

They demanded the firm to compensate them for the selling of the 10 percent shares, arguing that Kideco should have offered the shares to them. Pasir administration demanded an East Kalimantan court to order the company to pay compensation in excess of US$300 million, and insisted that the court annul the sale of 10 percent of Kideco?s shares. Kideco shareholders refused to meet their demand. The court on December 24 last year, decided to reject the suitor?s request.

The Ministry of energy and Mineral Resources, which represent central government, had ordered Kideco to proceed with divestment after the government and Kideco had agreed on a $365 million valuation of the entire shares of the company.

Kideco operates a huge coalmine in Pasir regency, East Kalimantan, with production capacity of 15 million tons per annum. Kideco is a subsidiary of South Korea?s Sam Tan Corp. (alex)