No major decision made on KPC divestment
Saturday, September 13 2003 - 02:21 AM WIB
Bisnis Indonesia reported on Saturday that the meeting agreed to further discuss the problem related to the divestment of the coal producer in forthcoming meeting. ?But the meeting is optimistic that the KPC divestment could be completed by the end of this year,? the source told the daily.
The meeting which was especially arranged to discuss issues related to KPC divestment agreed to reappoint the Ministry of Energy and Mineral Resources to handle the long delayed divestment.
The control and supervision task was returned back to the Ministry of Energy and Mineral Resources from the State Ministry for the Supervision of State Owned Enterprises because the later lacked legal power to supervise companies, which directly operate under the control of the other ministry.
The State Ministry for the Supervision of the State owned Enterprises took over the task to supervise the KPC divestment from the Ministry of Energy and Mineral Resources early last year.
Under the existing contract, KPC shareholders should divest 51 percent of its shares to local investors as part of the mandatory divestment program. The divestment that should had been completed two years ago has been delayed for several times. Among the problems in the divestment plan is the refusal of KPC management to sell the shares to nominees appointed by the government.
The main shareholders Tio Tinto and BP which holds 50 percent stake each in KPC later announced that the two had reached an agreement to sell their entire stake to local company Bumi Resources. The move has angered the government not only because it was made when the mandatory divestment was still under negotiation but also because the deal was made without its approval.
Bumi Resources has said that it would commit to continue the divestment plan. (*)