Experts demand transparency over acquisition of KPC<\/p>\n
By Mochammad N. Kurniawan<\/p>\n
SAMARINDA, East Kalimantan (JP): Experts said on Saturday that
\nPT Intan, which has been appointed by the East Kalimantan
\nadministration to finance the planned acquisition of coal mining
\ngiant PT Kaltim Prima Coal (KPC), must "reveal its identity" in a
\nbid to ensure transparency.<\/p>\n
Mining analyst Iswan Priady said that the lack of transparency
\nover the appointment of Intan had made local people suspicious
\nabout the intentions of Intan, and doubted whether the investor
\nwould contribute prosperity to them.<\/p>\n
"We don't know yet who PT Intan actually is. It is their
\n(Intan's and the local government's) obligation to provide a
\nsatisfactory answer," Iswan said at a one-day seminar on the KPC
\ndivestment program.<\/p>\n
KPC, which operates a huge coal mining site in Sangatta, East
\nKutai regency, is obliged to divest a 51 percent stake to the
\nEast Kalimantan government.<\/p>\n
But there has been criticism of the lack of transparency in
\nthe appointment of Intan, which some said was a Jakarta-based
\ninvestment company linked to a group of influential businessmen
\nand former top government officials.<\/p>\n
The weekend seminar was participated by representatives of
\nKPC, officials of both the central and local government,
\nbusinessmen, local legislators, and mining analysts.<\/p>\n
Intan, which was supposed also to speak at the seminar, did
\nnot send any of its officials.<\/p>\n
Iswan also criticized the East Kalimantan government for not
\nholding an open tender when selecting an investing partner for
\nthe acquisition of the KPC shares.<\/p>\n
He added that the administration should also first explore the
\npossibility of bank financing, instead of appointing a private
\ninvestor, to obtain a better deal.<\/p>\n
Local government sources said that under the deal with Intan,
\nthe East Kalimantan government would be granted a 5 percent stake
\nin KPC if Intan succeeded in purchasing a majority stake in the
\ncoal mining giant.<\/p>\n
Iswan said that many banks would be interested in providing
\nloans to finance the acquisition because the KPC coal mining
\noperation had proved capable of generating a high return on
\ninvestment, which, according to one estimate, could reach around
\n20 percent, compared with Libor (the London interbank offering
\nrate) of 3.6 percent.<\/p>\n
He added that KPC had also enjoyed strong profits from the
\ncoal operation, with average net profit between 1996-1998
\nreaching US$116 million.<\/p>\n
"Anyone who invests there (in the coal mine) will secure a
\nhigh profit margin, as has been enjoyed by KPC," Iswan said.<\/p>\n
KPC is equally owned by Anglo-Australian Rio Tinto, and
\nBritish-American oil and gas giant BP.<\/p>\n
The divestment program of KPC has become controversial, with
\nnegotiations going on for two years. The government and KPC are
\ncurrently in negotiation over the price of the company's shares.<\/p>\n
Meanwhile, vice chairman of the East Kalimantan Chamber of
\nCommerce and Industry Zulkifli Sahab also objected to the local
\ngovernment's deal with Intan.<\/p>\n
Zulkifli said that local investors like himself were willing
\nto provide financing for the planned acquisition.<\/p>\n
"We (local businessmen) have the money. There is no reason not
\nto support the acquisition," he said.<\/p>\n
Assistant secretary of the Kutai Timur regency administration
\nIsran Noor confirmed that the provincial administration had
\nsigned a memorandum of understanding with Intan, but said that
\nthe agreement was not final.<\/p>\n
"Other investors still have the opportunity to become a
\nfinancing partner as long as they can give us a better deal than
\nIntan," he said. (iwa)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/experts-demand-transparency-over-acquisition-of-kpc-1447893297",
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