KPC to value company entire shares above $500 million
Tuesday, January 13 2004 - 02:31 AM WIB
The head of Investor relations of publicly listed PT Bumi Resources Tbk – the owner of KPC – Martinus Peter T. said whenever there was a new share offering, the price of the shares would also change. And this is in line with the coal contract.
“Therefore, as per the contract, KPC appointed independent experts to calculate the price and we will forward it to the government,” Martinus told Business in Jakarta last weekend.
Since there is an improvement in the international coal price, KPC will fix the price above $500 million, he said.
“We will fix the price above $500 million. This price is still below the earlier government-fixed price of $822 million,” Martinus said.
Director General of Geology and Mineral Resources Simon Sembiring said recently the government and shareholders of East Kalimantan-based coalminer PT Kaltim Prima Coal (KPC) had in principle agreed to offer 32.4 percent shares in the company to Indonesian investors starting from this month.
In order to materialize the plan, the two parties will soon negotiate the price of the company’s shares, Simon said.
"The share offering will last until March," Simon said.
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, KPC had allocated around 18.6 percent shares to be sold to East Kutai regency administration.
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. (*)