BP and Rio Tinto to sell KPC to PT Bumi Resources
Posted: 22 July 2003
BP announced it has agreed to sell its 50 per cent interest in
the Indonesian coal mining company PT Kaltim Prima Coal (KPC) to
PT Bumi Resources, an Indonesian-controlled resources company.
BP's equal partner in KPC, Rio Tinto, has reached a similar agreement
with the result that, on completion of the sale, KPC will be wholly
owned by Bumi Resources.
Bumi Resources will purchase BP and Rio Tinto's interests in KPC
together for $500million, in cash including assumed debt, which
will divided equally between BP and Rio Tinto.
Subject to approval by PT Bumi Resources shareholders and other
approvals, the parties anticipate completion of the deal in October
2003.
Having sold its other coal interests in 1989-90, BP's shareholding
in KPC is its only interest in coal operations worldwide.
KPC operates a world-class coal mine located near Sangatta in East
Kalimantan, Indonesia. The mine produces around 18 million tonnes
of steaming coal annually for exports to key markets in the Asia
Pacific region, Europe and the United States. KPC directly employs
about 2,700 people and contributes around $450 million each year
in export revenue to Indonesia.
Bumi Resources has interests in oil, natural gas and mining, hotel
and tourism and related services and general trading. Established
in 1973, it became a public company in 1990 and is fully listed
on the Jakarta and Surabaya Stock Exchanges. Bumi Resources already
own PT Arutmin Indonesia - one of Indonesia's largest coal producers.
BP and Rio Tinto will work with Bumi Resources to ensure a smooth
transition of ownership and are committed to ensuring that there
will be no impact on service to customers. KPC will brief staff
and local communities on the transition process.
The financial advisor on the transaction is JP Morgan. Linklaters
is acting as legal counsel to BP on the sale.
For more information see www.bp.com.
Posted by Richard Price,
Editor Pipeline Magazine
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