PTBA has Rp370 billion cash to purchase KPC shares

State coal mining firm PT Batubara Bukit Asam (PTBA), which has planned to hold initial public offering (IPO) in December, will have free cash of Rp370 billion (US$=Rp9,000) that can be used to buy shares of East Kalimantan-based coal miner PT Kaltim Prima Coal (KPC), company president director Ismet Harmaini said on Tuesday.

Presently, PTBA has a total of Rp600 billion in cash, a portion of which will be used to pay its debts, Ismet told reporters in the company?s public expose meeting.

?If shareholders agree, we will use the Rp370 billion to buy KPC shares,? Ismet said. The company might also consider to seek additional amounts from other sources to buy KPC shares when the Rp370 billion was not enough, Ismet said.

KPC holders Rio Tinto and BP Plc early this year agreed with the central government on a US$822 million valuation of the entire shares of KPC, the country?s most profitable coalminer. KPC formally offered in July 51 percent of its shares to Indonesian investors through the central government, and recently the central government named PTBA to buy 20 percent of KPC shares and picked two companies from East Kalimantan to acquire the remaining 31 percent stake.

Ismet said on Tuesday a number of banks had offered loans to his company, but he added PTBA would only borrow in dollar.

He added PTBA might also consider issuing bonds to purchase KPC shares.

In a public expose meeting on Tuesday, PTBA disclosed one more time its plan of selling 346.5 million shares in mid-December through IPO. The shares will include 315 million of government?s shares in the company and 31.5 million new shares.

The IPO shares represent 15 percent of PTBA?s enlarged equity.

The greatest portion of IPO proceeds will be for the state budget. (godang)