Sumbawa Barat regency wants to buy 3 percent stake in NNT

The administration of Sumbawa Barat regency has said it is ready to buy a 3 percent stake in PT Newmont Nusa Tenggara (NNT), which offered the shares as a part of its divestment program for US$109 million.

Sumbawa Barat administration?s legal representative Ryad Areshman Chairill said the regency is holding negotiations with several banks and financial institutions from both inside and outside the country to form a consortium to provide the money.

Ryad was speaking after Minister of Energy and Mineral Resources wrote a letter to the Sumbawa Barat regent through letter No. 3091/80/MEM.B/2006 dated August 15, 2006 regarding NNT shares offer. In his letter, the minister said there is no need for the central government to buy shares in NNT.

Ryad said the regency thinks that there?s a need to buy NNT shares because it will have an effect on the development of people?s economic centers.

Central government gives the regency to respond the offer within 30 days from August 2.

Under the CoW, foreign shareholders of NNT is obliged to gradually divest at least 51 percent of NNT?s shares to Indonesian government or Indonesian owned entities, starting with 15 percent 5 years after commercial operations (2005) and 8 percent the following year (2006). NNT is only obliged to divest 3 percent this year as local company PT. Pukuafu Indah (PI) has already controlled 20 percent of NNT?s shares. PI is controlled by Jusuf Merukh Family. The 51 percent divestment is expected to be completed in 2010.

Current foreign shareholders are Newmont Mining Corp (45 percent) and a consortium led by Japan?s Sumitomo (35 percent). (godang)