KPC asked to extend share divestment process for three months

Officials of East Kalimantan-based coal miner PT Kaltim Prima Coal (KPC) are in talks with its shareholders to decide whether they could give Indonesian investors more time to complete due diligence audit on the company, a government official said Friday.

?The government has asked the company to extend share divestment process for three months. In principle, KPC agrees with us, but it said it would have to consult its shareholders about our request,? said Djoko Darmono, secretary general of the Ministry of Energy and Mineral Resources.

World mining and energy giants Rito Tinto and BP Plc equally own KPC, which operates a huge coal mine in East Kutai, East Kalimantan.

Djoko said KPC was expected to decide on whether or not to meet the government?s request by the middle of this month.

He said that Indonesian investors namely state coal mining firm PT Batubara Bukit Asam (PTBA) and two companies owned by East Kalimantan province needed more time to complete due diligence audit on KPC.

Last July, KPC formally offered to sell to Indonesian investors, through the government, 51 percent of its shares at a price of US$419.22 million. The government immediately allocated 31 percent of the offered shares to East Kalimantan provincial administration, and later appointed state coal mining firm PTBA to buy the remaining 20 percent shares.

However, PTBA and East Kalimantan province?s companies PT Melati and PT Pertambangan dan Energi failed to fulfill the January 31, 2003 deadline to make transactions for KPC shares.

PTBA said this week the price of KPC shares was too high, and that it needed more time to conduct due diligence audit on the company. Meanwhile, East Kalimantan authorities have not clarified why they had not completed due diligence audit on KPC. (godang)