KPC in difficulty to pay its suppliers

East Kalimantan-based PT Kaltim Prima Coal (KPC) has encountered difficulties in paying its suppliers and contractors including to PT Trakindo, one of the company's mine contractor, Bisnis Indonesia reported Wednesday.

Marihot Simamora, the manager of Trakindo's branch, said that the payment for Trakindo had been delayed since Bumi Resources, as the owner of KPC, signed an agreement on selling its entire stake to a consortium of Borneo Lumbung Energy several months ago.

He refused to disclose the amount owed by KPC but a source said that the arrears comprising of the fee and other kinds of payment for Trakindo's services could reach US$1 million.

Bumi Resources' spokesman Geroad Jusuf denied that the company had faced difficulties in paying the company's suppliers and contractors. "There is no problem with Trakindo," he said.

Bumi Resources recently agreed to sell the company's entire stake in KPC, PT Arutmin and Indocoal Resources to a consortium led by Borneo Lumbung Energy for US$3.25 billion. The sales had been approved by the company's shareholders during an extra-ordinary meeting in May. (*)