South Sumatra will buy one percent of PT Bukit Asam shares

The provincial administration of South Sumatera has agreed to buy about one percent of state owned coal producer PT Bukit Asam?s shares or about 21 million shares, with total investment of about Rp 13 billion (US$1 = Rp 9,000) during the company?s initial public offering (IPO) which was launched on Dec. 12, Kompas reported on Tuesday.

South Sumatera Governor Rosihan Arsyah said in Palembang on Monday that the equity participation was important in a bid to minimize the local people?s criticism against the coal producer?s privatization program.

"Although it is only one percent, the purchase has a significant meaning because when the privatization was announced many people expressed fears that the privatization would cause the loss of the provincial government?s control in the company," the governor said.

The provincial administration would team up with a third party in the purchase of PT Bukit Asam?s shares, Rosihan said, adding that the equity participation would be taken from the province?s budget beginning 2004.

According to the governor, Muara Enim and Lahat regencies have been also recommended also to buy the company?s shares. He said that it would be quite important for the two regencies to take part in the equity participation because the company?s concession areas were located in the two regencies.

"Other regencies are not recommended but they still have the chance to do the same thing," he said.

The mining company has offered about 346.5 million shares or about 16.26 percent of the its total shares during the IPO period which was closed on Monday. The shares consist of 315 million government?s shares and 31.5 million new shares. The shares are sold at Rp 575 a piece. (*)