United Tractors will soon divest stake in Berau Coal

Publicly listed PT United Tractors Tbk (UT) will soon sell its entire stake in its coal-mining subsidiary PT Berau Coal in a bid to raise some US$100 million in cash to repay short-term debts, which will mature in 2002.

Jeffrey Mulyono, president director of Berau coal told Petromindo.com in an interview that three foreign investment banks - Banque Paribas, Bank of America and Westlander Bank-had been invited to submit their proposals to become UT?s financial advisor in the divestment plan.

?UT will pick one of them sometimes next month to help find a strategic investor which are interested in buying the shares,? said Jeffrey.

UT holds 60 percent stake in PT Berau Coal, while another local company PT Amadian Tritunggal and Japanese trading powerhouse Nissho Iwai hold 30 percent and 10 percent, respectively.

Based on Banque Paribas?s initial appraisal, the value of PT Berau Coal?s entire assets is about US$150 million. However, Jeffrey said that the actual value would not be known until the due diligence audit is completed.

Earlier in May, a UT executive said that the plan to sell Berau Coal and PT Pama Persada Nusantara, another UT?s mining contractor subsidiary might be delayed due to unfavorable economic and political condition in the country.

Berau coal, which operates a coal mine in Berau regency in East Kalimantan plans to produce about 6.5 million tons of coal this year, an increase of about 45 percent from 4.9 million tons in 2000.

Berau Coal exports its products mainly to Taiwan, Hong Kong, Japan, Thailand and Korea. Berau also sells some of the coal production to several local power plants. (alex)