Govt to annul plans by Soros to purchase KPC shares
By R. Amoros
Tuesday, June 13 2000 - 03:00 AM WIB
Director general of mining Surna T. Djajadiningrat said that he was not aware if international financier George Soros had clinched a deal with the East Kalimantan administration to jointly acquire shares in the giant coal mining company PT Kaltim Prima Coal (KPC).
But Surna said that if this was true, the government would have to annul it because the KPC shares were only supposed to be sold to domestic investors as stipulated in the mining contract of work.
"If it's true that there's Soros in it, then we'll have annul it. The divestment of KPC must be for the interest of the people of East Kalimantan," Surna told reporters on Monday.
Surna was responding to unconfirmed reports that the East Kalimantan administration, through its newly formed entity PT Melati Satya Bhakti has reached a deal with Soros investment firm Batavia Management Investment Ltd to help the former in financing the acquisition plans. Melati was also reportedly to have reached a similar deal with local investment firm PT Intan Bumi Persada.
The deals have provided the East Kalimantan administration with some US$300 million in cash to purchase the KPC shares.
According to its contract with the government KPC was supposed to divest some 30 percent of its stake last year. Because this was not realized, the company had to divest some 37 percent this year. The company is obliged to divest up to 51 percent stake. Last year, the company offered $175 million for the 30 percent stake.
The East Kalimantan administration and local House of Representatives have insisted that KPC should divest up to 51 percent stake this year.
The East Kalimantan Kaltim Post daily reported on Tuesday that the East Kalimantan administration and the House would visit Jakarta this week to meet with the director general of mining to discuss the possibility of acquiring up to 51 percent stake.
The paper added that the administration had hired Jakarta-based law firm Darmawan and Co. to help negotiate with the government. (*)