Govt to ask KPC to extend share divestment process for six months
Friday, March 14 2003 - 10:02 AM WIB
The initial agreement between the government and KPC was that the whole divestment process, including share payment, would be completed by January 2003. It did not happen however mainly because appointed buyers namely state coal miner PT Batubara Bukit Asam (PTBA) and East Kalimantan province?s company PT Bhakti Satya had not completed their due diligence audit on KPC as stipulated by last year?s agreement between the government and KPC.
?We will request KPC to extend divestment process for six months,? the secretary general of the Ministry of Energy and Mineral Resources, Djoko Dharmono, told reporters.
Djoko said that of the six months, the first three months would be for due diligence audit on KPC, while the remaining three months would be used to complete share payment.
Djoko said however that the start of the proposed six-month period would have to be agreed upon with KPC.
KPC operates a huge coalmine in East Kutai regency in East Kalimantan. World energy and mining giants Rio Tinto and BP Plc equally own the company, which is Indonesia?s most profitable coal mining firm.
Last July, following contractual obligations, KPC shareholders formally offered 51 percent of its shares to Indonesian buyers through the Indonesian government. In turn, the government allocated 20 percent of the offered stake to PTBA and the remaining 30 percent to East Kalimantan administration.
Djoko said Friday the government would let PTBA and PT Bhakti Satya to freely negotiate with KPC on share price, in accordance with business principles.
KPC had offered the 51-percent stake at US$421 million, which PTBA and Bhakti Satya viewed as too high.
The mandatory divestment program had been delayed for at least three years due to a dispute over the percentage of the shares that must be sold to the central government and East Kalimantan province. The latter had demanded to buy the entire 51-percent stake. (godang)