Bumi obtains shareholders approval to acquire KPC<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Shareholders of publicly-listed PT Bumi Resources approved on
\nTuesday the company's plan to acquire East Kalimantan-based coal
\nmining giant PT Kaltim Prima Coal (KPC).<\/p>\n
The shareholders also endorsed Bumi's move to borrow money
\nfrom international lenders to help finance the acquisition.<\/p>\n
According to a press statement issued following an
\nextraordinary shareholders meeting, the company is finalizing
\ntalks with foreign financial institutions grouped under the
\nInternational Club Deal Consortium to seek some US$430 million in
\nloans.<\/p>\n
Bumi head of investor relations Martinus Peter was optimistic
\nthe company could raise the funding needs for the transaction by
\nOct. 10.<\/p>\n
The transaction is valued at $500 million. So far, Bumi has
\npaid $40 million. While $430 million would be raised through
\nloans from financial institutions, Martinus said that the company
\nwas considering issuing bonds to raise the remaining $30 million.<\/p>\n
"We might issue bonds to finance the remaining $30 million,"
\nhe said. "I cannot say anything certain about that because right
\nnow the structure of the financing of the acquisition is still
\nongoing."<\/p>\n
KPC is equally owned by Anglo-American energy giant BP Plc.
\nand Anglo-Australian mining giant Rio Tinto. The two reached an
\nagreement with Bumi to sell their respective foreign-registered
\nvehicle companies, which own all the KPC shares, to Bumi.<\/p>\n
KPC operates a huge coal mining site in Sangatta, Kutai Timur
\nregency, producing about 16 million tons a year. Some 96 percent
\nof the high quality coal is exported to international markets,
\ngenerating $450 million in revenue each year. Under a contract of
\nwork with the central government, the KPC owners are obliged to
\ndivest a majority stake to local investors. But this divestment
\nprogram has been stalled for more than two years due to various
\nreasons.<\/p>\n
The deal with Bumi has caused a furor as it was done at a time
\nwhen a team set up by the Office of the State Minister of State
\nEnterprises was in the process of finalizing talks with the East
\nKalimantan administration and state coal mining firm PT Tambang
\nBatubara Bukit Asam on the divestment of a majority stake in
\nKPC. The province and the state firm would purchase a 51 percent
\nstake in KPC.<\/p>\n
The controversial plan caused the Jakarta Stock Exchange to
\nsuspend the trading of Bumi's shares for a few days last month.
\nAfter the company provided an explanation to market authorities,
\nJSX resumed the trading on Aug. 20.<\/p>\n
Bumi's shares were traded on the JSX at Rp 170 (2 U.S. cents)
\non Tuesday, up from Rp 160 the previous day.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bumi-obtains-shareholders-approval-to-acquire-kpc-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}