PTBA says not too eager to buy KPC?s shares

JSX-listed state coal mining firm PT. Tambang Batubara Bukit Asam (PTBA) said it was not too eager to get hold of 20 percent of Kaltim Prima Coal (KPC) as it considered the price ?too high? and the shares would not give the company controlling interest.

?From PTBA?s point of view, KPC is not an interesting investment as the price is too high. For 20 percent shares, we must pay around US$160 million, while PTBA currently has only free cash of $35 million. To get the balance of $125 million would require huge effort of financial engineering. More over, the 20 percent shares is too small to give us control over the company,? said PTBA president Ismet Harmaini in a parliamentary hearing Monday.

Ismet, however, was quick to point that PTBA had yet come to conclusion to turn down offer to buy KPC as PTBA would wait for the result of due diligence on KPC before making any decision.

The government last year assigned PTBA to buy 20 percent shares of KPC, while the remaining 31 percent of KPC shares that must be divested was assigned to companies owned by East Kalimantan regional administrations

KPC divestment process has been deadlocked, as thus far, KPC had not allowed East Kalimantan-owned companies to conduct due diligence. (godang)