Government okays Timah's bid for Kideco stake

The government has given the greenlight for publicly-listed state-owned company PT Timah to buy a 41 percent stake in the coal producer PT Kideco Jaya Agung, a government official said on Thursday.

Roes Aryawijaya, State Minister of State Enterprise's deputy for energy, mining, telecommunication and strategic industry, noted, however, that Timah should first look into its financial capabilities before deciding to acquire the Kideco stake.

?If it (the takeover) will bring benefits and the company (Timah) has money, go ahead,? Roes told Petromindo.Com.

Kideco, owned by South Korea?s Sam Tan Corp, is required to gradually divest up to 51 percent of its shares to Indonesian companies after 10 years of commercial production under its coal contract of works. Kideco had managed to sell 10 percent shares to two local companies namely PT Sumber Mitra Jaya and PT Muji Inti Utama, which bought 5 percent each.

The Ministry of energy and Mineral Resources and Kideco have agreed on a US$365 million valuation for the entire shares of the company.

Timah earlier said it had sent a letter to Kideco to express its interest in buying the firm's 41 percent stake.

A Kideco official earlier said five companies had submitted letter of interest to buy its stake, but he refused to identify them.

Kideco operates several coalmines in East Kalimantan with a total output of 14 million tons in 2003. (Godang)