Pertamina takes Nusamba's 35% stake in TPI

Pertamina takes Nusamba's 35% stake in TPI

JAKARTA (JP): State oil and gas company Pertamina has acquired
PT Nusantara Ampera Bhakti's (Nusamba) 35 percent stake in
insurance company PT Tugu Pratama Indonesia (TPI).

The deal, which increases Pertamina's ownership in the
insurance company to 80 percent, was approved during the state
oil company's shareholders meeting on Friday, Pertamina spokesman
Ramli Djaafar said in a statement.

He did not disclose the value of the transaction but said
Pertamina's pension fund holds the remaining 20 percent share.

Ramli added the meeting also accepted the retirement of the
insurance company's president, Sonni Dwi Harsono, and
commissioner Mohamad "Bob" Hasan.

Pertamina will appoint its employees to Tugu's new board of
directors and commissioners, he said.

Nusamba is 80 percent owned by the Dakab, Dharmais and
Supersemar foundations linked to former president Soeharto.
Hasan, a golfing partner of Soeharto, has a 10-percent stake in
the business group and the remaining 10 percent is held by
Soeharto's eldest son Sigit Hardjodjudanto.

Assets of the three Soeharto foundations were recently taken
over by the government.

Founded in 1981, Tugu has become the country's largest
insurance company, mainly due to its monopoly of indemnity
insurance in the oil and gas sector for more than a decade.

Hasan controlled the insurance company during Soeharto's era
despite his position as a minority shareholder.

Under Hasan's control, the company reportedly charged
Pertamina marked-up premium rates.

Ramli said Tugu, under pressure from Pertamina, was ready to
reduce the premium rate by 41.3 percent for the operation of
foreign oil and gas contractors, by 66.4 percent for Pertamina's
aviation company Pelita and by 30 percent for Pertamina's own
operation.

"Pertamina is still negotiating for a lower premium rate with
excellent claim service," Ramli said.

Pertamina's newly appointed president Martiono Hadianto was
recently under fire for extending contracts with Tugu for the
operation of foreign oil and gas contractors despite his
predecessor Soegianto's promise to put the contracts up for
bidding.

Martiono defended his move by arguing that foreign insurance
companies would most likely edge out their local counterparts,
which lack expertise in oil and gas indemnity insurance, in open
bidding.

Legislators ultimately accepted Martiono's move on the
condition Pertamina acquired Nusamba's shares, replaced the
company president and allowed other local insurance companies to
obtain contracts from the country's oil and gas industry. (jsk)