Timah puts feelers out on buying KPC shares<\/p>\n
JAKARTA (JP): Publicly listed state tin company PT Timah has
\nshown interest in acquiring a stake in the country's largest coal
\nmining company, PT Kaltim Prima Coal (KPC), a senior mining
\nofficial said yesterday.<\/p>\n
"I've heard they (Timah and KPC) are negotiating now," Rozik
\nBoedioro Soetjipto, director general of mining at the Ministry of
\nMines and Energy, told The Jakarta Post yesterday on the
\nsidelines of a luncheon meeting between Minister of Mines and
\nEnergy Kuntoro Mangkusubroto and members of the Indonesian-
\nAustralian Business Council (IABC).<\/p>\n
Organized by IABC, the meeting drew 300 businesspeople from
\nAustralian mining, oil and gas companies.<\/p>\n
KPC has invited three state mining companies -- PT Timah,
\npublicly listed general mining company PT Aneka Tambang and coal
\nmining company PT Batubara Bukit Asam -- to buy 23 percent of its
\nstake to fulfill a mandatory divestment program.<\/p>\n
Under the existing regulation, KPC is required under its
\ncontract to divest up to 51 percent of its shares either to the
\ngovernment, the Indonesian people or companies controlled by
\nIndonesians, between the fifth year and 10th year of its
\ncommercial production.<\/p>\n
KPC says the 23 percent of shares offered to Timah, Aneka
\nTambang and Bukit Asam are valued at $176 million based on the
\ndue diligence conducted by independent appraiser Jardine Fleming
\nNusantara.<\/p>\n
The three companies were given three months until Sept. 16 to
\ndecide on the offer.<\/p>\n
Aneka Tambang's operation director Harsojo Dihardjo earlier
\nindicated the company would probably reject KPC's offer.<\/p>\n
"We are still studying the offer. But it is not part of our
\npriority at present," Harsojo said.<\/p>\n
KPC initially wanted to sell its shares through the Jakarta
\nStock Exchange, but the government decided that it should first
\nsell its shares directly through private placement.<\/p>\n
The contract gives the government the right to decide the type
\nof divestment.<\/p>\n
Rozik said the ministry had ordered KPC to first offer its
\nshares to the state mining companies. If none was interested in
\nthe shares or able to buy them, KPC could offer its stake to the
\nIndonesian-owned private companies.<\/p>\n
If none of the firms were interested in the offer or able to
\nbuy them, KPC could sell its shares through the stock exchange.<\/p>\n
"Selling through the stock exchange is the last option in the
\ndivestment program," Rozik said.<\/p>\n
KPC is equally owned by British Petroleum and Rio Tinto, both
\nfrom Britain, and operates a rich coal mine in Sangatta, East
\nKalimantan. It signed a contract with the government in 1982 and
\nstarted production in 1992.<\/p>\n
It is now the country's largest coal mining company, with a
\nprojected output of 15 million tons this year.<\/p>\n
It exports all its coal. With current coal prices of between
\n$25 and $35 per ton, the company will receive earnings of between
\n$375 million and $525 million this year.<\/p>\n
Analysts say the planned acquisition of KPC's stake will have
\na positive impact on Timah, which is currently being considered
\nby State Minister for the Empowerment of State Enterprise Tanri
\nAbeng as the future holding company of state mining companies.<\/p>\n
Tanri earlier said the government was mulling two strategies
\nto privatize state mining companies, including the strategy of
\nmerging Aneka Tambang and Bukit Asam with Timah as the holding
\ncompany prior to the privatization.<\/p>\n
Another strategy would be to privatize them individually, he
\nsaid. (jsk)<\/p>",
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"sponsor": "Okusi Associates",
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