Release: Antam to begin due diligence of acquisition of Freeport stake
Thursday, June 30 2005 - 09:37 AM WIB
The letter from the MSOE states in regards to the proposed share transfer of the government?s stake in PT FI that Antam, in the framework of good corporate governance and prudence, is requested to conduct a due diligence to provide for a more detailed judgment of the share transfer plan. The letter states the due diligence must be conducted in accordance with commercial principles and existing regulations.
Antam will now begin the process to appoint independent advisors and conduct a thorough financial, legal, technical and commercial evaluation of the potential acquisition. In order to ensure objective advice, the appointed financial advisor may not become, nor will have any links to the financial arranger. If upon evaluation Antam needs to raise funds, a financial arranger will be appointed. Companies interested in becoming one of Antam?s independent advisors, are invited to contact Antam?s Director of Finance.
In the announcement of June 6th, 2005, Antam stated it was also investigating the possible simultaneous purchase of the 9.36% stake of PT FI owned by PT Indocopper Investama. Following a preliminary evaluation, and in consideration of the input of various market participants, Antam has decided to prioritize the acquisition of the government?s stake in PT FI, rather than the stake held by PT Indocopper Investama. Currently, the acquisition of the government?s stake appears more feasible than acquiring both stakes and is a unique opportunity for Antam. Although still at a very preliminary stage and pending minority shareholder approval, there is a possibility the acquisition would be effected through a cashless transaction, wherein the government would transfer its shares of PT FI to Antam in exchange for newly issued Antam shares.
Antam?s President Director Dedi Aditya Sumanagara said:
?We see a unique opportunity to profitably and significantly grow Antam?s assets and then leverage up and fund our existing pipeline of projects. However, the bottom line is this: we will only make the acquisition if following a full evaluation and due diligence, we determine this is what is best for the company and our shareholders.?
Antam is exploring the opportunity of acquiring the government?s minority stake in PT FI, which operates a world-class copper and gold mine, in order to maintain a value generating strategy in a dynamic business environment. Rather than detracting from Antam?s current strategy of maximizing shareholder value by focusing on its core business and improving and growing its core gold, nickel and bauxite reserves and operations, the acquisition of the stake in PT FI may allow Antam to increase leveraging and increase support for Antam?s existing project pipeline. As well, depending on the price of the stake and the size and certainty of the expected dividend from the investment, Antam may also enjoy attractive returns. The costs and benefits, the size of the investment, the financing, and other key issues will all be considered as part of the full evaluation.
Antam?s management is thankful and delighted with the support that has been displayed by numerous parties, as this support is required for the potential share transfer to occur.
However, Antam understands this is general support as Antam is still at the preliminary stages of conducting an evaluation. The share transfer depends on the government?s approval as owner of the shares and a business evaluation that demonstrates the transaction gives value to shareholders, including minority shareholders. (end of release)