Govt ups offering price for Inalum

By Bambang Atmaja

The government has decided to increase the offering price for controlling shares in smelting giant PT Indonesia Asahan Aluminium (Inalum) to US$588 million from the initial offer of $390 million.

Minister of Industry MS Hidayat said on Monday that the government is optimistic that the Japanese consortium operating Inalum, Nippon Asahan Aluminium (NAA), will accept the new and final price offer.

He said that there is no need for both the government and NAA to go to international arbitration to settle the price dispute.

NAA is scheduled to hand over its 58.8 percent shares in Inalum later this month when its contract expires. But the company has been engaged in a protracted negotiation with the government over the selling price of the shares. NAA has demanded $650 million for the shares.

Hidayat said that the new price offer was the final offer from the government, which has also been approved by the Finance and Comptroller Agency, BPKP.

He hopes for the government to be able to sign a master of agreement (MA) with NAA on October 25 that would give five days period for the settlement of administration, as on November 1 the taking over would be implemented.

?One of the requirements of the MA is that the funds (for transfer of share) must already be transferred on November 1. We decided to sign the agreement five days before it,? said Hidayat. On Tuesday the government would hold a meeting with lawmakers to seek their approval, he said.

Editing by Reiner Simanjuntak