Govt, Newmont agree on 2010 divestment price

After a series of negotiations, the government has finally decided to fix the price for the remaining 7 percent stake that PT Newmont Nusa Tenggara (NNT) has to divest at US$236 million, Kontan reported Friday.

Bambang Setiawan, the director general of mineral, coal and geothermal at the ministry of energy and mineral resources, said that the price for NNT?s 7 percent stake was based on the company's book value which is estimated to reach the $3.38 billion.

?It is not expensive because with the surging price of gold and copper, the market value of the company could exceed $5 billion,? he said.

Bambang said the finance ministry had yet to decide whether to buy the the 7 percent stake. If the government rejects the offer, it will offer the local government the opportunities to buy it, as in the company?s previous divestments.

In April 2010, NNT's foreign shareholders offered the final 7 percent shares as part of its 2010 divestment obligation required under a 1986 contract. The 7 percent stake is priced at $444.1 million, about 80 percent higher than the 7 percent stake offered in 2009.

Under its contract of work, NTT?s foreign shareholders are required to divest 31 percent of their shares to the government or local businesses. This means that NNT's foreign shareholders need to sell another 7 percent to be able to meet the requirement.

PT Multi Daerah Bersaing, which is 75 percent owned by PT Bumi Resources, through its unit PT Multicapital and 25 percent by the local administration company, has bought up to 24 percent of the 31 percent shares that have to be divested. (*)