Govt sets up team to screen investors for KPC stake

Govt sets up team to screen investors for KPC stake

A'an Suryana, The Jakarta Post, Jakarta

The government has set up a team to screen financial backers from
the administrations of the East Kalimantan provincial and East
Kutai regency in the purchase of a stake in coal-mining giant PT
Kaltim Prima Coal (KPC), Minister of Energy and Mineral Resources
Purnomo Yusgiantoro has said.

"The due diligence team was set up last Thursday," Purnomo
told legislators during a session with the House of
Representatives Commission VIII for mining and energy.

The team comprises officials from the central government, East
Kutai regency and East Kalimantan provincial administrations, he
said.

Purnomo said that the team was tasked to, among other things,
set up criteria and requirements for potential investors, to
assess and evaluate investors and to make recommendations.

KPC, which operates a large coal-mining site in the Sangatta
area of East Kutai regency in East Kalimantan, is obliged to
divest a 51 percent stake to Indonesian investors. The stake is
valued at US$419.2 million.

But the divestment process has been delayed several times due
to various reasons. Both the East Kutai administration and the
East Kalimantan provincial government have expressed interest in
purchasing the stake. A number of private investors are also
eying the stake, but they need to purchase it through the local
governments.

The central government is expected to acquire a 20 percent
stake in KPC, with the remaining 31 percent to be divided among
potential investors.