Indonesia Power plans to acquire 34% of Kideco
Monday, December 8 2003 - 03:37 AM WIB
?The offer is very interesting. Moreover we are still considering to enter the coal industry,? said Firdaus Akmal, the president of Indonesia Power, a subsidiary of state owned electricity company Perusahaan Listrik Negara (PLN).
Firdaus said that buying a majority stake in Kideco had been the best alternative so far to meet the company?s program to have its own coal mining company. At present Indonesia Power, which operates all the power plants formerly owned by PLN, buys most of its call needs from the country?s major coal producers under a long-term contract.
According to Firdaus, Indonesia Power was looking for a coal mining company with production capacity of between one and two million tons a year. ?The offer from Kideco is considered the best alternative because we have not yet found the medium size coal mining company so far,? he said.
Kideco, owned by South Korea?s Sam Tan Corp, is required to gradually divest up to 51 percent of its shares to local companies after 10 years of its commercial production as part of the mandatory divestment program stated in its coal contract of works (CCoW). Kideco had managed to sell 10 percent shares to two Indonesian companies namely PT. Sumber Mitra Jaya and PT. Muji Inti Utama, which got 5 percent each.
In 2001, the Korean company with an annual production of about 11 million tons of coal, was required to sell 37 percent of its shares but it failed. In 2002, the company?s shares that should be sold were increased by 7 percent to 44 percent.
The divestment process was resumed this year after a number of delays. The government and Kideco?s current owner have agreed to fix the value of the company?s 100 percent shares at US$365 million. (*).