United Tractor?s stake in Berau Coal valued at US$80 million

The value of PT United Tractors Tbk?s 60 percent stake in Kalimantan-based coal mine operator PT Berau Coal reaches about US$80 million, according to the results of the due diligence audit made by one of four bidders of the heavy equipment distributor?s stake, Bisnis Indonesia reported on Friday.

The total value of the mine operator is about US$140 million, said one of the bidders, which carried out due the diligence audit from Jan. 16 to Feb 22. The due diligence audit also covered the financial aspects of the company, coal reserve condition, human resource development and the company?s coal marketing.

According to the audit result, the financial condition of the company is healthy enough although the company still owes certain amounts of debts. However, based on the audit result, the company?s long-term planning for the development of its mining activities still needs improvement to ensure that the life cycle of the mining activities could be extended to more than 10 years.

The coal produced by Berau contains 5,000 calories per kilogram, still lower than 7,000 calories found in every kilogram of coal produced by PT Kaltim Prima Coal. For a comparison, the calorie content of coal produced by PT Arutmin Indonesia ranges between 5,000 and 6,000 per kilogram.

As part of its consolidation, United Tractors will divest its 60 percent stake in PT Berau. Four bidders of the company?s stake are currently conducting due diligence audit. The bidders include state owned PT Tambang Batubara Bukit Asam, BHP Billiton, Glencore Coal Australia Pty. Ltd and Straits Resources Ltd. (*)