Freeport offers shares to government for $1.7b
Friday, January 15 2016 - 01:13 AM WIB
Gold and copper giant PT Freeport Indonesia, the local subsidiary of US-based Freeport McMoRan Copper & Gold Inc, has finally made formal offer of 10.64 percent shares in the company to the government of Indonesia to meet a mandatory divestment program.
?Freeport has sent a letter to the minister of Energy and Mineral Resources, and we have received (the offer) yesterday,? said Director General of Mineral and Coal at the ministry, Bambang Gatot Ariyono on Thursday, the deadline for Freeport to make the offer.
Bambang said that PT Freeport put a value of its 100 percent shares at US$16.2 billion, which means that the value of the 10.64 percent shares is $1.7 billion, lower than the $2 billion estimate made by an earlier report in this portal.
PT Freeport, which operates an underground mine in Papua, is obliged to divest a total of 30 percent shares to Indonesian investors with first priority given to the Indonesian central government, which already owns a 9.36 percent stake in the company. As such, PT Freeport will only have to divest the remaining 20.64 percent shares, 10.64 percent of which to be divested this year.
Bambang said that the government will have 60 days to evaluate and respond to the PT Freeport offer. It will set up a team comprising of experts from the Ministry of Energy and Mineral Resources, Ministry of Finance, and Office of State Minister of State Owned Enterprises to review the price offer.
He, however, said that the central government will not exercise its option to buy the PT Freeport shares as no funds for the acquisition have been allocated.
Bambang said that the government would likely allow state-owned companies to acquire the 10.64 percent PT Freeport shares.
As has been previously reported, a number of state-controlled companies including IDX-listed PT Aneka Tambang Tbk (Antam), PT Bukit Asam Tbk (PTBA), and PT Indonesia Asahan Alauminium (Inalum) have agreed to jointly acquire the shares. Some reports also said that state owned pension fund company PT Taspen, or tin giant PT Timah will take part in the group. State-controlled Bank Mandiri reportedly has been assigned to help raise the funding requirement for the acquisition of PT Freeport shares.
Editing by Reiner Simanjuntak