Kideco divestment deadline extended

Divestment of 37 percent shares of East Kalimantan-based coal mining firm PT. Kideco Jaya Agung, which is scheduled to be completed his month is delayed until February next year, a government official said.

?Both Kideco and potential buyers had agreed to the new deadline, and Kideco had appointed BNP Paribas as financial advisor,? said Mahyudin Lubis, a senior official at the ministry of energy and mineral resources Tuesday.

Lubis said seven local companies are interested bidder in purchasing Kideco?s shares, namely: shipping company Arpeni Pratama Ocean Line, mining contractor Sumber Mitra Jaya, Amo Indonesia, Saratoga Capital, Tanito Harum, Gunung Bayan Pratama, and Bumi Resources. The last three bidders are in possession of coal mining operations.

Industry source, however, said two companies had withdrawn their bids.

The source said the deadline extension was necessary in order to give time for both parties to negotiate.? There are possibilities that the price go down since coal prices had also been down. The valuation price was set when coal prices were high,? said the source.

Under the coal contract of work, Kideco is obliged to gradually divest 51 percent of its shares to Indonesian-owned business entities. In 2001, Kideco was scheduled to offer 37 percent of its shares to Indonesian owned business. In December 2001, the company and the government had agreed to value 100 percent of the company at US$ 415 million at most.

In 2002, Kideco is required to divest 44 percent of its shares, but the government and Kideco had yet reached agreement on divestment price.

Kideco is one of Indonesia?s top coal producers, operating a coalmine in Pasir regency, East Kalimantan.The company, which is currently wholly owned by Sam Tan Co.Ltd of South Korea, plans to produce some 11.5 million tons of coal in 2002. (godang)