Update: Govt confirms deal clinched on Kideco divestment

Government confirmed on Wednesday that two Indonesian companies had signed sales and purchase agreement (SPA) to acquire 10 percent shares in East Kalimantan-based coalminer PT. Kideco Jaya Agung.

?Out of the 37 percent shares of Kideco?s offered coal mining contractor Sumber Mitra Jaya and PT. Muji Inti Utama, which is an affiliate of coal miner Gunung Bayan Pratama had agreed to purchase 5 percent each at the base price of US$ 415 million,? said director of coal and mining enterprises at the ministry of energy and mineral resources Mahyudin Lubis.

Lubis said the remaining 27 percent of unsold shares would be carried over to 2002 divestment, where Kideco is scheduled to offer 44 percent of its shares. ?With 10 percent already sold, Kideco will offer 34 percent in 2002 divestment round,? said Lubis.

Lubis said the 34 percent shares of Kideco had been offered to companies like PT. Tambang Batubara Bukit Asam, tin miner PT Timah, regional government of east Kalimantan provincial government and Pasir regency government, where Kideco?s mining is located and other Indonesian companies.

Under the Coal Contract of Work, foreign coal miners operating in Indonesia are required to gradually divest 51 percent of their shares to Indonesian business entities. In 2001, Kideco was scheduled to offer 37 percent of its shares and another 7 percent in 2002.

The government and Kideco had yet come with 2002 divestment price, but the source indicating that the valuation for Kideco?s 100 percent shares would be lower than 2001 valuation.

?That?s why the companies are not in hurry to buy all the shares offered. The remaining 27 percent shares that are not sold in 2001 divestment will be carried over to 2002 divestment offer, with base price that would likely be significantly lower,? said the source.

Kideco is currently 100 percent owned by South Korea?s Sam Tan Corp. Kideco has production capacity of 14 million tons of coal annually. (godang)