KPC must enter stock market if it fails to find buyers
KPC must enter stock market if it fails to find buyers
JAKARTA (JP): Coal mining company PT Kaltim Prima Coal (KPC)
must offer shares on the Jakarta Stock Exchange next year if it
fails to fulfill its mandatory divestment, a minister said.
Minister of Mines and Energy Kuntoro Mangkusubroto said here
on Friday if the company failed to sell its shares to local
companies through a private placement scheme it would have to
enter the local stock market.
He ruled out the possibility of delaying the company's
divestment program if the company could not find buyers this
year.
"If it cannot sell its shares to (local) companies, I won't
(allow it to) postpone the divestment program again. Instead, I
will ask it to enter the stock exchange," Kuntoro said.
KPC, equally owned by British companies British Petroleum and
Rio Tinto, operates a coal mine in Sangatta, East Kalimantan.
It is the country's largest coal mining company with an annual
output of 15 million tons.
Under its contract of work (COW), KPC is required to divest up
to 51 percent of its shares to the Indonesian government,
individual Indonesian investors or companies controlled by
Indonesians between the fifth and 10th year of commercial
production. KPC commenced commercial production in 1992.
The ministry last year allowed the company to delay its
divestment program by one year after it failed to sell 23 percent
of its shares to publicly listed tin mining company PT Timah.
Timah backed out of the deal following a disagreement on the
price of the shares. KPC valued the shares at US$176 million.
Under its contract of work, KPC must divest 30 percent of its
shares by the end of this year.
Director General of Mining Rozik B. Soetjipto earlier said the
ministry wanted KPC to sell its shares to local partners through
a private placement.
However, he said the ministry and KPC must first agree upon
the price of the shares before offering them to prospective
buyers.
The ministry will employ a consultancy firm to work with
appraisers hired by KPC to value the shares, Rozik said.
Timah, along with the East Kalimantan provincial
administration, reportedly is still interested in buying a stake
in KPC.
KPC initially proposed offering its shares on the Jakarta
Stock Exchange in 1997. The government, however, turned down the
proposal, ordering the company to divest its shares through a
private placement arrangement.
Rio Tinto's general manager of finance, Phillip Strachan,
recently said KPC had presently ruled out the option of selling
its shares on the Jakarta Stock Exchange given the bearish
condition of the market.
Analysts believe the local market will turn bullish next year
as the country's macroeconomic conditions improve. (jsk)