KPC to offer 32.4% shares this month

The government and shareholders of East Kalimantan-based coalminer PT Kaltim Prima Coal (KPC) have in principle agreed to offer 32.4 percent shares in the company to Indonesian investors starting from this month, a government official said Friday.

In order to materialize the plan, the two parties will soon negotiate the price of the company?s shares, Director General of Geology and Mineral Resources Simon Sembiring said.

"The share offering will last until March," Sembiring told reporters.

KPC is 81.4 percent owned by publicly listed PT Bumi Resources Tbk, while the remaining 18.6 percent is owned by East Kutai regency administration in East Kalimantan.

Bumi last year acquired the entire shares of KPC from company equal shareholders Rio Tinto and BP Plc. The shares were valued at US$500 million.

Late last year, East Kutai regency administration bought an 18.6 percent stake in KPC. Regent Mahyudin dismissed earlier media reports that they had sold the regency's shares in the company to a firm owned by Bumi.

The new owner of KPC is obliged (according to a coal contract of work, or PKB2B) to divest up to 51 percent stake in the company to Indonesian investors. The sale of the stake to East Kutai regency, and the plan to sell the additional 32.4 percent shares is part of the divestment program.

For years, the government had been facilitating the divestment process of the KPC stake but had faced various problems, which led to the sale of the entire stake by the company?s original owners (Rio Tinto and BP) to Bumi.

East Kalimantan provincial administration and state owned coal miner PT Tambang Batubara Bukit Asam are among of the potential investors for the KPC stake.

KPC, one of Indonesia?s most profitable coal mining producers, operates a huge coalmine in East Kutai?s Sangatta district.

Most of KPC's coal output is for exports. (godang)