TEMPO.CO, Jakarta - Bambang Gatot, director general of minerals and coal at the Energy and Mineral Resources Ministry, hopes that PT Freeport Indonesia would set its share divestment price by March. The government interpreted that the 60-day evaluation period was started since a deal was made, instead of an offer that was pitched last week.
“When the deal was made, the Energy and Mineral Resources Ministry reported it to the Finance Ministry, who would make the offer,” Bambang Gatot said during a hearing with House of Representatives’ Commission VII overseeing energy in Jakarta on Wednesday, January 20, 2016.
Based on procedures, Freeport’s 10.64 percent share divestment was offered to the central government. If the government did not make the purchase within 90 days since the offer, the shares would be pitched to the regional government. If the regional government failed to make the purchase within a 60-day period, the shares would be offered to state-owned companies or region-owned companies. The process will be repeated next year if no parties interested in buying the shares.
Bambang explained that Freeport’s share divestment had to go through three stages. During the first stage in January, the government formed a divestment team, explained the method, made the assumption of Freeport Indonesia’s financial model, and clarified the method.
The team then will conduct a negotiation based on the method, assumption, and the financial model in February. During this stage, the technical team will conduct a due diligence in Mimika, while the financial team will focus on clarification and supporting data for the financial model assumption to conduct a valuation.
The last stage is setting the price in March. Once the price is set, the Energy and Mineral Resources Ministry will offer the share divestment to the central government, the provincial administration, or the regency administration.
“If there’s no answer within 60 days, the shares will be offered to state-owned companies or region-owned companies,” Bambang said.
Meanwhile, PT Aneka Tambang, PT Inalum, PT Timah and PT Bukit Asam had a scheme to acquire Freeport’s share divestment. The companies formed a holding company or a Special Purpose Vehicle (SPV). Antam president director Teddy Badrujaman projected that the state-owned Special Purpose Vehicle would have an equity of US$510 million. The rest of the funding of US$1.19 billion would be acquired from banks or other financial institutions.
Teddy said that the loans for the SPV would be acquired from investment banking.
“The source of the loan repayment would be from Freeport’s dividend. If Freeport could not pay the dividend, there would be no repayment,” he said.
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