Foreign firms compete to buy stake in KPC and Arutmin

Three foreign companies -- Mitsubishi Corporation, BHP Billiton and Tata Group -- are competing to acquire 30 percent stake in coal mining companies PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia.

KPC and Arutmin is a subsidiary of JSX-listed PT.Bumi Resources.

?These three foreign companies are intensively studying the data of KPC and Arutmin with the help of the investment bank Credit Suisse. Even one of them had already visited the mining sites,? an executive who knows about the transaction told Bisnis Indonesia last Friday.

But, according to him, to sign the purchase agreement would be difficult this year. At the latest, it would be in the first quarter of 2007.

Bumi is selling a minority stake in KPC and Arutmin after failing to sell its entire assets to PT Borneo Lumbung Energi for US$3.25 billion four months ago.

?Yet the three foreign companies are ready to buy the assets but they will ask for compensation from Bumi. It (compensation) will be either asking for management control or an option to increase the ownership in several years,? the executive said.

Bumi Resources senior vice president of investor relations Dileep Srivastava said he didn't know about the buyers of KPC and Arutmin

?We respect the confidentiality of the transaction,? Srivastava said. (*)