KPC divestment price agreed
Thursday, March 7 2002 - 05:44 PM WIB
The agreement was reached in a Thursday night meeting between government, KPC shareholders Rio Tinto and BP plc, East Kalimantan provincial administration and East Kutai regent, where KPC is located.
?We have reached a common understanding with all parties involved and we have agreed on a fair price of KPC,? said Wimpy S. Tjetjep, director general of geology and mineral resources at the ministry of mines and energy.
Wimpy said 51 percent of KPC shares would be offered next week. He however declined to reveal the price.
An industry source who is closely involved in KPC divestment process said the price agreed was US$ 822 million for 100 percent of KPC shares.
?In my opinion, that?s a fair price and I think everybody is quite satisfied,? said the source.
Under the coal contract of work, KPC is obliged to divest 51 percent of its shares to Indonesian owned business entity after ten years of operation.
East Kalimantan administration had been insisting for months to be given first right to acquire KPC shares at a far lower price than the company offered. The East Kalimantan administration had filed separate lawsuits against KPC and central government on the matter.
Wimpy further said government and KPC had agreed that companies owned by East Kalimantan provincial administration and East Kutai regency would be given first right to acquire the shares.
?That?s in line with the spirit of autonomy which gives greater role to regional governments,? said Wimpy.
?East Kalimantan administration had also agreed to settle legal matters including lawsuits amicably to make the divestment process smooth,? he said.
Wimpy said formal announcement on KPC divestment would be made Monday.
KPC, which is equally owned by Rio Tinto and BP, is the country's second largest coal producer, targeting to produce 17 million tons this year.(alex)