Kutai regency buys 18.6 % of KPC shares for $104m
Thursday, October 16 2003 - 02:53 AM WIB
Mahyuddin said that the purchase of KPC's shares which was signed on Monday was made in line with the agreement between East Kalimantan provincial administration and the Ministry of Energy and Mineral Resources.
"The East Kutai administration will issue promissory notes as the payment. The notes will be guaranteed by a consortium," he was quoted by Kompas as saying.
The sale of the coal company's shares to East Kutai regency was made just few days after Bumi Resources formally completed the takeover of the entire KPC shares from former shareholders Rio Tinto and Beyond Petroleum.
Bumi Resources which also owns 80 percent interest in PT Arutmin, another coal producer based in Kalimantan took over the entire stake of KPC from Rio Tinto and BP for US$500 million. The new shareholder promised that the company would continue the divestment program despite the takeover.
According to the mandatory divestment requirement, the divestment of the 51 percent should have been completed by 2001 but it was delayed due to difference in prices.
After several delays, the ministry of energy and mineral resources nominated last year East Kalimantan administration to purchase 31 percent of KPC shares in the divestment program and another 20 percent to state owned coal mining company PT Batu Bara Bukit Asam (PTBA).
About 60 percent of the 31 percent of KPC shares (about 18.6 percent of the total shares) that would be divested to East Kalimantan government has been allocated to East Kutai regency and the other 40 percent or about 12.4 percent to the East Kalimantan provincial administration.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that state owned coal producer PTBA still had a strong interest to buy the 20 percent stake in KPC.
"The company will soon report details of its plan to buy KPC's shares," he said. (*)