Antam wants a piece of Freeport
The Jakarta Post, Jakarta
The government has officially requested state gold and nickel miner PT Antam to carry out a due diligence study on the possible acquisition of a 9.36 percent government stake in giant gold producer PT Freeport Indonesia.
The publicly listed company would focus on the acquisition of the government's stake in Freeport rather than a stake of similar size held by PT Indocopper Investama, Antam said in an emailed statement.
"Currently, the acquisition of the government's stake appears more feasible than acquiring both stakes," the firm said in the statement.
The due diligence process will provide a more detailed assessment of the share-transfer plan, which could possibly be done through a cashless transaction, where the government transfers its shares in Freeport in exchange for newly issued Antam shares.
"(This scheme) is still at a very preliminary stage and pending minority shareholder approval," the company said in the statement.
Antam's president Dedi Aditya Sumanagara previously said that it would be better for the company to buy Indocopper's and the government's shares, or 18.72 percent in total.
With a state company controlling the stake, the government will have the right to place a commissioner on Freeport's board and gain wider supervision of its activities. It will also get a bigger share of the profits.
But the provincial administration of Papua, where Freeport operates its giant gold mine, has also shown an interest in acquiring the stake owned by Indocopper, which is a subsidiary of Freeport.
The local unit of U.S. gold giant PT Freeport is obliged to divest close to 10 percent of its shares to domestic investors. The central government and the local administration will be given priority.
Based on market prices, economist-cum-legislator Dradjad Wibowo has estimated that the stake should be worth some $619 million.
Prices of metals have continued to rise this year, following a strong surge in 2004. Antam booked Rp 195.6 billion (US$20.27 million) in net profit in the first quarter of 2005, a 33.18 percent increase from Rp 146.9 billion recorded in the same period last year.