|
The West Nusa Tenggara provincial government and the Sumbawa
and West Sumbawa regency governments will team up with a number of
domestic firms to jointly buy a 10 percent stake in PT Newmont Nusa
Tenggara (NNT).
Kontan reported Wednesday that the West Nusa Tenggara provincial
administration and Sumbawa regency would establish a consortium with a
local company, PT Bumi Resources, the country's biggest coal producer,
to acquire a 7 percent stake, while West Sumbawa regency would
collaborate with another local firm to buy the other 3 percent stake.
It is not clear yet what participating interests each company will have.
The plan to form consortiums was arrived at following the local
governments' decision to reject NNT's offer of providing soft loans to
pay for the shares.
The provincial and regency administrations have refused the offer of
risk-free loans as such arrangements would prevent the local
governments from becoming involved in NNT's management.
NNT, the operator of a copper and gold mine at Batu Hijau, West Nusa
Tenggara (NTB), should have sold a 3 percent stake to local investors
last year, and a further 7 percent this year, as part of the company's
mandatory divestment program, under which the foreign shareholders of
NNT must sell a minimum of 51 percent of its shares to local investors
by 2010.
Under the program, NNT is required to first offer the shares to the
central government. If this offer is rejected, the right to buy the
shares automatically goes to the local administrations. Local companies
are allowed to buy the shares only if both the central and local
governments fail to purchase them.
The Energy and Mineral Resources Ministry's director general for
geology and mineral resources, Simon Sembiring, said Wednesday that the
central government had decided to not buy the shares due to budgetary
constraints.
However, he added, the local governments had shown an interests in
purchasing the shares, with the West Nusa Tenggara provincial
administration and Sumbawa regency eyeing the 7 percent stake, and West
Sumbawa Regency the other 3 percent stake.
To speed up the divestment of the 3 percent and 7 percent stakes, NNT
had offered no-risk bridging loans to help the local administrations
pay for the shares.
The loans could have been used to pay for the 3 percent stake worth
$109 million, and the other seven percent stake worth $282 million. The
local governments would then repay the loans out of the royalties they
would receive from NNT.
Under the soft loan mechanism, the local governments would also have
been assured of an annual cash flow of US$333,333 for each percentage
of their ownership in the operation.
The local governments, however, refused the offer, saying they
preferred to team up with local companies to buy the stakes.
NNT spokesman Rubi Purnomo told The Jakarta Post that the plan by the
local governments to establish consortiums with third parties meant
that the divestment process would now be based on a
business-to-business approach, meaning that there would have to be more
negotiations to determine the price of the shares to be divested.
|
