KPC has not received the new schedule for share divestment
Saturday, March 15 2003 - 03:37 AM WIB
Anang Rizkani Noor, Deputy Director for External Relations of Rio Tinto, said in Jakarta on Friday that the government had not made any decision related to the extension of the deadline for the offering of the company?s shares.
?We will meet the government next week. So far we have not received any information from the government about the new schedule,? he was quoted as saying by the daily.
Meanwhile Secretary General of Energy and Mineral Resources Djoko Darmono acknowledged that the government would extend the deadline for the sale of KPC?s shares after the appointed bidders state owned coal producer PT Batubara Bukit Asam and companies representing East Kalimantan authorities failed to settle the transaction under the existing schedule.
?According to the contract, the offering period last three months plus three months. Because the deadline could not be met, there would be an extension for another three months plus three months,? he said.
Djoko said that the government has also asked the bidders to give inputs on how to carry out the transaction. ?After that we will meet KPC to hold another negotiation,? he added.
According to the existing framework agreement, if the appointed buyers fail to meet the January 31 deadline in settling their purchases of KPC?s shares, KPC is allowed to offer the shares to other Indonesian buyers after consultation with the government.
KPC, which operates a large coal mining area in East Kalimantan, is equally owned by world mining giants Rio Tinto and BP. Under its contracts of works, the company?s shareholders are required to divest 51 percent of their shares to local investors.
The mandatory divestment program has been delayed for at least three years due to a dispute over the percentage of the shares that must be sold to the central and local government. The local administration had demanded to buy all of the 51 percent stake.
According to the latest compromise, 31 percent of the 51 percent of KPC shares would be sold to the provincial administration and another 20 percent to the central government. The latter then appointed the 20 percent of KPC shares to Bukit Asam. (*)