Tenaga to keep South Kalimantan coal unit despite offers

Malaysia's state utility firm Tenaga Nasional Bhd (TNB)will keep a majority stake in its South Kalimantan coal-producing unit even though it has received some attractive offers for the company, sources said as quoted by Business Times.

TNB holds 92.5 per cent of TNB Coal International Ltd, which has coal mining rights in South Kalimantan. The rest of the firm is held by the coal mine concession owner Robert Priantono Bonosusatya.

It ventured into the business to ensure coal supply for its power plants.

"TNB has received some very attractive offers from third parties to buy over its shares in TNB Coal, but the group would likely continue holding a majority stake in the mine," said the source.

It is believed that TNB had received offers from PT Adaro, Indonesia's largest coal producer, and PT Pamapersada Nusantara (Pama).

TNB had invested US$11.9 million in 2003 to purchase the stake and it made an advance payment of US$17 million to allow the mine to operate.

Under the PT Adaro offer, the company wants to buy the mining stake in TNB Coal, valuing the asset at US$23.75 million.

It plans to make an upfront payment of US$5.50 million and a deferred payment of US$18.25 million on a staggered basis.

Meanwhile, Pama wants to buy TNB Coal by writing off TNB's investments and advances, totalling US$28.9 million.(*)