Newmont Nusa Tenggara considers IPO in Indonesia

PT Newmont Nusa Tenggara (PT NNT), a local unit of US mining giant Newmont Mining Corporation and the operator of the Batu Hijau gold and copper mining in West Nusa Tenggara, is considering offering a part of its shares to the public through an initial public offering (IPO) at the local stock market,

The plan has been revealed in a letter sent by the company to its shareholders. In the letter, a copy of which was obtained by The Jakarta Post, the company invited all shareholders to attend an extraordinary shareholders meeting planned to be held in Aug. 19.

The letter, signed by PT NNT?s president director Martiono Hadianto, stated that the meeting would discuss three main agendas, including a plan to offer new shares to the public.

?The meeting is to discuss consideration and, if thought fit, grant approval to the issuance of new shares that are derived from the company?s portfolio shares, and to offer/sell the new shares to the public through the Public Offering of up to 1,127,620,000 new shares," PT NNT said in the letter.

The meeting will also discuss two other matters related to the public offering plan.

The first agenda to be discussed is a plan to change the nominal value of each share from Rp 165,000 (US$17) to Rp 100 so that each share will be split into 1,650 shares.

Following the share split, the company?s total number of issued shares will increase to 11,276,199,000 shares.

The second agenda is a plan to increase the authorized capital of the company from Rp 1.32 trillion to Rp 1.85 trillion.

PT NNT?s public affairs Kasan Mulyono said the company did plan the meeting, but he refused to mention the agenda.

PT NNT current shareholders are Newmont Indonesia Limited (31.5 percent); Sumitomo subsidiary Nusa Tenggara Mining Corporation (24.5 percent), domestic mining firm PT Pukuafu lndah (20 percent), and a joint venture by the regional governments and PT Multi Daerah Bersaing (24 percent).

Pukuafu confirmed it had received the invitation, but the company said it refused to attend the meeting and would reject the public offering concept.

?PT. NNT?s mining contract is included in Indonesia?s fourth generation of mining contract requiring national shareholders to hold majority stakes in the company.

?The public offering will only ensure the company is controlled by foreign shareholders,? said Jusuf Merukh, founder of Merukh Enterprises, which is a parent company of Pukuafu.

A 1986 mining contract requires PT NNT?s foreign shareholders, Newmont and Sumitomo, to divest as much as 31 percent of their shares to local companies.

By far, the two companies have divested 24 percent of the required shares to PT Multi Daerah Bersaing. Currently, Newmont and Sumitomo are in the negotiation with the government for divestment of the final 7 percent shares scheduled for this year.

However, Pukuafu is taking legal action against the divestment According to the company, earlier shareholder meetings in 2007 and 2008 have agreed that the 31 percent shares must be granted to Pukuafu. (*)