KPC raises price of 51 percent stake to be sold to East Kalimantan
Friday, May 25 2001 - 06:30 AM WIB
The giant coal mining company PT Kaltim Prima Coal (KPC) has more than doubled the price for its 51 percent stake to be acquired by the local East Kalimantan administration, the local Radar Kaltim daily said on Friday.
The paper quoted provincial administration secretary Sayid as saying that KPC now demanded US$880 million for the 51 percent stake compared to the $350 million agreed with the ministry of mineral resources and energy last year.
Sayid said that the new price was a result of calculation made by U.S. investment bank Salomon Smith Barney, which was recently appointed by KPC to handle the divestment program.
Sayid said that East Kalimantan would reject the new price and would continue to renegotiate with KPC. He said that this would further delay the divestment process.
No KPC officials were available to comment to Petromindo.com on Sayid?s statements Friday morning.
The local government had previously accused KPC of intentionally delaying the divestment process because it did not want to loose the controlling stake. KPC is obliged to divest its shares to local investor according to contract with the government. The company had insisted that it was only suppose to divest up to 44 percent this year, but the East Kalimantan administration said that KPC must divest up to 51 percent based on the mining contract. The central government recently ordered KPC to divest up to 51 percent stake.
The decision seems to disappoint KPC which is set to lose controlling ownership. The East Kalimantan administration had invited a Jakarta-based investor called PT Intan to finance the acquisition.
KPC is equally owned by Rio Tinto and BP. (*)