Offering period of Kaltim Prima Coal?s shares extended

The government has formally asked the management of PT Kaltim Prima Coal (KPC) to extend the offering period of the East Kalimantan-based coal producer?s 51 percent shares to another six months to give the appointed buyers to carry out due diligence audit on the company?s operation, Bisnis Indonesia reported on Friday.

"We have sent the extension proposal to KPC. They are now still studying it," Simon Sembiring, a member of the inter-governmental team on KPC?s divestment program, told reporters following the team?s meeting on Thursday.

The bidders would be given three months to carry out due diligence audit and another three months to settle the payment, he said.

Separately Anang Riskani Noor, Deputy Director for External Relations of Rio Tinto ? one of the shareholder of KPC, said that the company had received the government?s proposal to extend the offering period for the divestment program for another six months.

"We just received the proposal yesterday," he said.

The extension of the share offering period was extended after PT Bukit Asam and East Kalimantan authority missed the January 31 deadline to settle their purchases of KPC?s 51 percent share.

KPC, which operates a large coal mining area in East Kalimantan, is equally owned by world mining giants Rio Tinto and BP. Under its contracts of works, the company?s shareholders are required to divest 51 percent of their shares to local investors.

The mandatory divestment program has been delayed for at least three years due to a dispute over the percentage of the shares that must be sold to the central and local government. The local administration had demanded to buy all of the 51 percent stake.

According to the latest compromise, 31 percent of the 51 percent of KPC shares would be sold to the provincial administration and another 20 percent to the central government. The latter then appointed the 20 percent of KPC shares to Bukit Asam. (*)