Dispute won't stop mine sale: New Hope

Dispute won't stop mine sale: New Hope

Tan Hwee Ann, Bloomberg, Australia

New Hope Corp., which is selling a stake in Indonesia's biggest coal mine, said the sale won't be stopped by a reported legal dispute between Indonesian buyer Edwin Soeryadjaya and a former stakeholder of the mine.

New Hope on Feb. 8 agreed to sell a 40.8 percent stake in the Adaro mine in South Kalimantan and half of a coal terminal for US$378 million to businessmen led by Soeryadjaya, the son of the founder of Indonesia's largest carmaker, PT Astra International.

Sukanto Tanoto, another Indonesian businessman, is claiming he has a preemptive right to buy the stake and is threatening to sue all parties involved in the transaction, the Australian Financial Review reported today, citing lawyer Lucas who it says is representing Tanoto.

"That's not right," about the preemptive right, said New Hope's Chairman Robert Millner in Sydney in an interview. "There's no effect whatsoever on New Hope at this stage."

New Hope is selling its Indonesian assets after prices for power station coal rose to a record last year as China cut exports to meet domestic demand. Coal demand within Indonesia is set to surge by 2008. New Hope said it may use proceeds to double output at its Australian mine or return cash to investors.

Soeryadjaya controls PT Dianlia Sepymukti which owns 51 percent of Adaro.

Tanoto in 2002 was forced to sell his 40 percent stake in Adaro for $44 million to Soeryadjaya, after defaulting on a loan to Deutsche Bank AG, the Australian Financial Review said. Tanoto obtained a ruling from the Jakarta High Court on Feb. 25 which said the 2002 sale was legally flawed.

Under the ruling, Tanoto had a preemptive right to buy New Hope stake in Adaro, his lawyer Lucas said, the paper reported.