KPC divestment program extended until end-June<\/p>\n
Moch. N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
The central government and East Kalimantan-based coal mining
\ngiant Kaltim Prima Coal (KPC) have agreed to extend by three
\nmonths to June 30 a deadline for KPC's shareholders to sell a 51
\npercent stake in the business.<\/p>\n
Ministry of Energy and Mineral Resources secretary general
\nDjoko Damono said on Thursday that the move was unavoidable
\nbecause the East Kalimantan provincial administration had
\ndeclined to drop its lawsuit against KPC and its shareholders.<\/p>\n
\"There's no other way but to extend the sale process, while at
\nthe same time, we'll continue to persuade East Kalimantan to drop
\nits lawsuit.\"<\/p>\n
Jakarta and KPC, however, agreed to maintain the value of 100
\npercent of KPC shares at US$822 million.<\/p>\n
KPC, which operates a vast coal mining site in Sangatta, East
\nKalimantan, is equally owned by Anglo-Australia mining group Rio
\nTinto and Anglo-American energy group BP Plc.<\/p>\n
According to its contract of work with the government, KPC is
\nobliged to divest up to 51 percent of its business to the
\ngovernment or local investors. The divestment program was
\nsupposed to be completed last year, but was delayed partly due to
\ndifferences over the value of the stake.<\/p>\n
The delay has prompted the East Kalimantan administration,
\nwhich has insisted it becomes the preferred bidder, to file a
\nlawsuit with the South Jakarta District Court demanding KPC pay
\ncompensation.<\/p>\n
Two weeks ago, Jakarta and KPC reached agreement over the
\nprice, a deal seen as paving the way for the stalled-divestment
\nprocess.<\/p>\n
But the East Kalimantan administration has so-far declined to
\ncancel the lawsuit on the grounds that KPC is also offering the
\nshares to other bidders.<\/p>\n
But KPC, referring to its contract of work with Jakarta, has
\nrefused to bow to East Kalimantan's demand.<\/p>\n
KPC plans to hold an open tender instead of giving priority to
\nEast Kalimantan.<\/p>\n
There are now several private investors who reportedly have an
\ninterest in buying the KPC stake.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kpc-divestment-program-extended-until-end-june-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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