KPC to offer shares after East Kalimantan drops lawsuit: Shareholders

East Kalimantan based coal mining giant PT Kaltim Prima Coal said on Thursday that it had signed an agreement on Monday, March 18, 2001 that it would proceed to offer 51 percent of its shares to Indonesian owned business entities as required by coal contract of work (CCoW) after all related legal actions have been withdrawn.

The company?s shareholders, Rio Tinto and BP Plc said in a statement the offer will be made concurrently to the Provincial Government of East Kalimantan, the East Kutai Regency and other interested Indonesian parties pursuant to KPC?s CCoW.

East Kalimantan provincial administration who had insisted to be treated as preferred buyer had file lawsuit against KPC and its shareholders on the ground that the latter intentionally slowing down divestment process which caused the former potential financial loss. East Kalimantan provincial administration also filed lawsuit against central government.

South Jakarta district court last week put Rio Tinto and BP?s assets in Indonesia on sequestration.

On Monday, the governor of East Kalimantan had agreed to withdraw all legal suits against KPC and government, but thus far, the legal suits had not been withdrawn.

Early this month the government of Indonesia and KPC shareholders had agreed that price for the offer is US$822 million on 100 percent basis and KPC is required to make the offer of 51 percent by March 31, 2002. (alex)