PT KPC to go ahead with IPO next year

JAKARTA (JP): Coal mining company PT Kaltim Prima Coal (KPC), based in East Kalimantan, plans to float its shares on the Jakarta Stock Exchange in March, the company said yesterday.

Company assistant to managing director Hadi S. Prayitno said KPC planned to sell 15 percent of its shares to the public at its initial public offering (IPO) next year.

"We shall continue floating shares in the following years to divest up to 51 percent of the total shares," he said.

KPC is equally owned by British Petroleum and Rio Tinto, both from Britain, and is operating a rich coal mine in Sangatta, East Kalimantan.

Under its contract, KPC is required to divest up to 51 percent of its shares to Indonesian people from the fifth to the tenth year of operation.

It should have started the divestment in 1995 but the government allowed it to postpone the divestment.

Hadi said several conglomerates had offered to buy the company's shares but the company preferred to float its shares so that many Indonesian people would have the opportunity to buy them.

Sources said some state-owned companies with support from some top officials at the Ministry of Mines and Energy also wanted to buy the company's shares under private placement.

KPC's contract did not specify the type of divestment.

"We are determined to sell the shares to the public so that many people can own this company. Anyway, it's the government who will decide on the type of investment," Hadi said.

KPC estimated its production this year at 13.5 million tons, up from 11.4 tons last year. It plans to raise output to 15 million tons next year.

The company exports all its output to Japan (32 percent), Taiwan (24 percent), Hong Kong (12 percent), Europe (21 percent), America (7 percent) and other Asian countries, including the Philippines and Malaysia (4 percent).

Hadi said the company's assets amounted to US$1 billion this year up from $600 million in 1992.

KPC recorded $400 million in sales this year, slightly above last year's figure.

He said the company had made a big profit over the past two years but he refused to reveal the amount.

According to Hadi, the company has benefited from the rupiah's sharp depreciation against the dollar because all of its output are exports and only 80 percent of its operation costs is in dollars.

But he said if the monetary crisis continued, the company would probably be affected in the long-term.

"Some exporting countries might demand buying our coal with their own currency in the future," he said. (jsk)